Abacus Research & Development Inc – ‘SB-2/A’ on 6/20/02

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Pre-Effective Amendment to Registration of Securities by a Small-Business Issuer   —   Form SB-2
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: SB-2/A      Pre-Effective Amendment to Registration of            56    246K 
                          Securities by a Small-Business Issuer                  
 2: EX-5        Opinion Letter                                         2     12K 
 3: EX-23       Consent of Accountant Letter                           1      5K 
 4: EX-23       Consent of Attorney Letter                             2     13K 

SB-2/A   —   Pre-Effective Amendment to Registration of Securities by a Small-Business Issuer
Document Table of Contents

SB-2/A
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U.S. SECURITIES AND EXCHANGE COMMISSION   
Washington, D.C. 20549    
---------------------   

AMENDMENT NO. 5   
TO    
FORM SB-2   
REGISTRATION STATEMENT    
UNDER THE SECURITIES ACT OF 1933    
---------------------   

ABACUS RESEARCH AND DEVELOPMENT, INC.   
---------------------------------------------   
(Name of small business issuer in its charter)    

Delaware                       7373                    85-0377572               
(State or other          (Primary Standard             (IRS Employer            
jurisdiction             of Industrial Classification  Identification           
incorporation            or Code Number)               Number)                  
organization)                                                                   

2601 Wyoming, NE  Suite 209   
Albuquerque, NM  87112    
(505) 766-9115    
(Address and telephone number of principal executive offices)   
---------------------   

2601 Wyoming, NE  Suite 209   
Albuquerque, NM  87112    
(Address of principal place of business or intended principal place of    
business)   

Clifford T. Matthews, President   
ABACUS RESEARCH AND DEVELOPMENT, INC.   
2601 Wyoming, NE  Suite 209   
Albuquerque, NM  87112    
(505) 766-9115    
(Name, address and telephone number of agent for service)   
--------------------    

Copies of Communications to:    

Stoecklein Law Group    
402 West Broadway, Suite 400    
San Diego, CA 92101   
(619) 595-4882    
Fax (619) 595-4883    

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Approximate date of commencement of proposed sale to public:    
As soon as practicable after the registration statement becomes effective   
--------------------------    

  If  this Form is filed to register additional securities for an offering
pursuant  to Rule 462(b) under the Securities Act, please check the following   
box  and list the Securities Act registration statement number of the earlier   
effective registration statement for the same offering. [ ]                     

  If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act   
registration statement number of the earlier effective registration statement   
for the same offering.[ ]                                                       

  If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act   
registration statement number of the earlier effective registration statement   
for the same offering.[ ]                                                       

  If  delivery of the prospectus is expected to be made pursuant  to  Rule
434, please check the following box. [ ]                                        

Calculation of Registration Fee   

                                                                [Download Table]

                                           Proposed                          
                                           Offering   Proposed               
                                            Price     Maximum                
                               Amount to     Per     Aggregate    Amount of  
   Title of Each Class of          be       Share     Offering   Registration
 Securities to be Registered   Registered    (1)     Price (1)     Fee (2)   
                                                                             
Common Stock, $.001 par value  1,000,000    $5.00    $5,000,000     $1,250   
                               ----------  --------  ----------  ------------
            TOTAL              1,000,000    $5.00    $5,000,000     $1,250   
                               ==========  ========  ==========  ============

(1)   The proposed maximum offering price is estimated solely for the purpose   
of determining the registration fee and calculated pursuant to Rule 457(c). 
(2)  Previously paid.                                                           

The  Registrant hereby amends this Registration Statement on such  date  or 
dates  as  may be necessary to delay its effective date until the  registrant   
shall   file  a  further  amendment  which  specifically  states  that   this   
Registration  Statement shall thereafter become effective in accordance  with   
Section  8(a)  of  the  Securities  Act of 1933  or  until  the  Registration   
Statement  shall  become  effective on such date as  the  Commission,  acting   
pursuant to said Section 8(a), may determine.                                   

Subject to Completion, dated _______________, 2002    

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Initial Public Offering                                                         
PROSPECTUS                                                            

ARDI    

1,000,000 Shares of Common Stock    
$5.00 per share   
The Offering                                                                    

                                                                [Download Table]
                       Per share    Total   
                                            
Public Price.            $5.00    $5,000,000
Commissions.              $0          $0    
Proceeds to ARDI.        $5.00    $5,000,000

Minimum Purchase.     200 shares    $1,000  

We are offering to the public a minimum of 600,000 and a maximum of 1,000,000   
shares of common stock on a "direct public offering" basis through our          
officer and director, Clifford Matthews.  We have set a minimum investment of   
200 shares ($1,000). If we do not sell at least the minimum of 600,000 shares   
by January 1, 2003, the offering will terminate and all money paid for shares   
will be promptly returned to the purchasers, without interest and without       
deduction.                                                                      

This is our initial public offering, and no public market currently exists      
for our shares.  The offering price may not reflect the market price of our     
shares after the offering. Funds received prior to the completion of the        
minimum offering amount will be placed into an escrow account at Sunwest        
Escrow, LC.                                                                     
________________________    

An investment in our common stock involves a high degree of risk.  You should   
purchase our common stock only if you can afford a complete loss of your        
purchase.  See "Risk Factors" beginning on page 4 for a discussion of           
material risks that you should consider prior to purchasing any of our common   
stock.                                                                          

Neither the Securities and Exchange Commission nor any state securities         
commission has approved or disapproved these securities, or determined if       
this prospectus is truthful or complete. Any representation to the contrary     
is a criminal offense.                                                          
________________________    

The  information  contained in this prospectus is subject  to  completion  or   
amendment.   We  have filed a registration statement with the Securities  and   
Exchange  Commission relating to the securities offered in  this  prospectus.   
We  may not sell nor may we accept any offers to buy the securities prior  to   
the  time  the registration statement becomes effective.  This prospectus  is   
not an offer to sell or a solicitation of an offer to buy any securities.  We   
shall  not  sell these securities in any state where such offer, solicitation   
or  sale  would be unlawful before we register or qualify the securities  for   
sale in any such State.                                                         
THE DATE OF THIS PROSPECTUS IS _________________, 2002.   

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Prospectus Summary    

You should read the following summary together with the entire        
prospectus, including the more detailed information in our consolidated         
financial statements and related notes appearing elsewhere in this              
prospectus. You should carefully consider the matters discussed in "Risk        
Factors."                                                                       

Abacus Research and Development, Inc. ("ARDI")                                  

 ARDI develops a particular type of computer software known as emulation
software.  Emulation software enables a computer or part of a computer of one   
type to imitate a computer or part of a computer of a different type. ARDI's    
emulation software allows PCs and workstations to run Macintosh software.       

Clifford T. Matthews founded ARDI in 1986 by beginning to write       
Macintosh emulation software.  In 1989 Clifford T. Matthews incorporated ARDI   
as a corporation in Delaware.  Since its founding, ARDI has been developing     
Macintosh compatibility using the methodology called reverse-engineering.       
Reverse-engineering is using information about an existing entity, for          
example a Macintosh computer, to create an emulation of that entity.  None of   
ARDI's employees, contractors or volunteers has disassembled any of Apple       
Computer's software; all of ARDI's reverse-engineering has been done using      
publicly available specifications and test programs run on Macintoshes. This    
process is known as strictly clean-room reverse engineering.                    

Macintosh programs use routines (collections of computer instructions)
provided by the Macintosh Operating System to interact with the Macintosh       
computer. ARDI has reverse-engineered 1,200 of these routines. One source of    
information ARDI has used is the Inside Macintosh series of documentation       
that lists the names of these routines and what each routine does.              
Programmers use these routines to construct their software. Writing its own     
set of 1,200 of these routines enables ARDI to sell software that allows        
hundreds of Macintosh applications to run on machines that do not contain       
Apple's intellectual property.                                                  

In addition to the 1,200 Macintosh-specific routines that ARDI has    
written, ARDI has also created software that translates computer instructions   
meant for the Motorola 680x0 family of Central Processing Units (CPUs) into     
the instructions used by the CPU inside PCs.  Motorola 680x0 CPUs were used     
in Apple's Macintosh computers from 1983 through 1994 and are currently used    
in Personal Digital Assistants (PDAs) such as those made by Palm and            
Handspring.  Software that allows a CPU to execute the instructions of a        
different type of CPU is known as a synthetic CPU.                              

 ARDI has combined its Macintosh-specific routines and its synthetic CPU
into two Macintosh compatibility product lines: Carbonless Copies and           
Executor.                                                                       

Carbonless Copies is used by Macintosh programmers to create new      
versions of their applications for non-Macintoshes.  For example, a company     
that developed a word processor for Japanese text for the Macintosh has used    
Carbonless Copies to create a version of their word processor for PCs running   
Microsoft's Windows operating system.  They also used Carbonless Copies to      
create another version of their word processor for PCs running the Linux        
operating system.  Carbonless Copies makes ARDI's 1,200 Macintosh-specific      
routines available to programmers who want to release their applications on     
Windows or Linux without rewriting their programs.                              

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  Executor is used by individuals to run their existing Macintosh software
on PCs. An example of an Executor user would be someone who uses a Macintosh    
at home and a PC at work. Executor allows this user the ability to create       
documents on their home machine and be able to read them on their work          
machine without having to purchase a PC for their home.                         

  Although ARDI's initial products have specifically been created to allow
Macintosh programs to run on PCs, the same synthetic CPU that is in ARDI's      
Executor product can emulate the CPU in certain Personal Digital Assistants     
(PDAs), enabling new hardware to be compatible with PDAs.                       

  ARDI currently has only two employees and its auditor has issued a going
concern qualification in the footnotes to its financial statements. ARDI has    
managed to remain in business on a very limited operating budget, which has     
forced a majority of the product programming to be borne by Clifford            
Matthews. The proceeds of this offering will allow ARDI to hire additional      
employees and improve its proprietary technology to increase functionality      
and applicability to technological changes.                                     

ARDI's principal offices are located at 2601 Wyoming, NE Suite 209,   
Albuquerque, NM 87112 and its telephone number is (505) 766-9115. ARDI's        
website can be accessed at www.ardi.com. Information contained on ARDI's        
website is not a part of this prospectus.                                       

The Offering    

Securities Offered.           600,000 shares minimum                            
                    1,000,000 shares maximum of common stock

Price Per Share.              $5.00                                             

Minimum Purchase.             200 shares or $1,000                              

Offering Termination Date.    January 1, 2003                                   

Common Stock Outstanding                                                        
before Offering.         2,393,770 shares of common stock             

Common Stock Outstanding                                                        
after Offering.          2,993,770 shares - minimum offering          
               3,393,770 shares - maximum offering

Estimated Net Proceeds.       $3,000,000 - minimum offering                     
         $5,000,000 - maximum offering

Use of Proceeds.                             The proceeds of the offering       
                          will be used for our marketing and promotional
                        program, additional product development, and
        for general working capital.

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                                                                [Download Table]

                        SUMMARY FINANCIAL INFORMATION                       

     The following table sets forth summary financial data derived from our 
financial statements. The data should be read in conjunction with the       
financial statements, related notes and other financial information included
in this prospectus.                                                         

                                        For the Six                For the  
                                          Months     For the Year    Year   
                                           Ended        Ended       Ended   
                                         March 31,    September   September 
                                           2002        30, 2001    30, 2000 
Operating Statement Data:               (unaudited)   (audited)   (audited) 
                                                                            
Income Statement Data:                                                      
Revenues:                                                                   
     Sales revenue                      $    28,875  $     64,506  $  68,577
     Licensing revenue                            0        56,000          0

Expenses:                                                                   
          Total Expenses:                    52,362       125,263    118,613
                                        -----------  ------------  ---------
Other Income or Expenses                                                    
     Interest Income                          2,130         6,167      4,975
     Interest Expense                       (6,782)      (11,086)   (22,382)
     Deemed interest expense                                                
     associated with beneficial                                             
     conversion of notes payable (1)             --   (1,277,365)         --
                                        -----------  ------------  ---------
Net Income (Loss) from Operations       $  (28,139)  $(1,287,041)  $(67,443)
                                        ===========  ============  =========
Basic and diluted earnings per share    $    (0.01)  $     (0.71)  $  (0.06)
                                        ===========  ============  =========
                                                                [Download Table]
                                             At           At          At    
Balance Sheet Data:                       March 31,   September   September 
                                            2002       30, 2001    30, 2000 
                                         (unaudited)  (audited)   (audited) 
                                                                            
Total Assets.                            $   113,406  $  146,440  $   75,698
Liabilities.                             $   199,405  $  204,300  $  312,230
                                         -----------  ----------  ----------
Stockholders' Equity (Deficit).          $  (85,999)  $ (57,860)  $(236,532)
                                         ===========  ==========  ==========

(1)    In January of 2001, ARDI issued 1,036,020 shares in a beneficial     
 conversion of amounts owed at September 30, 2000 totaling $17,660.  The
shares were valued at $1.25 for accounting purposes and the amount of 
value issued over the debt retired was included as Interest expense.  

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Risk Factors    

  Investors  in  ARDI should be particularly aware of the  inherent  risks
associated  with  its  business plan. As of the  date  of  this  filing,  its   
management is aware of the following material risks.                            

Risks Relating to Our Business:                                                 

Our auditor's report reflects the fact that without realization of additional   
capital, it would be unlikely for us to continue as a going concern.            

 As a result of our deficiency in working capital at September 30, 2001,
our auditors have included a paragraph in their report regarding substantial    
doubt about our ability to continue as a going concern. Our plans in this       
regard are to seek additional funding through this offering and future equity   
private placements or debt facilities.                                          

Our products may have defects, which could harm our reputation, decrease        
market acceptance of our products, cause us to lose customers and revenue,      
and result in liability to us.                                                  

 Our complex software products may contain defects or bugs. Often, these
defects and bugs are not detected until after the products have been shipped.   
If any of our products contains defects, or has reliability, quality or         
compatibility problems, our reputation might be damaged significantly and       
customers might be reluctant to buy our products, which could harm our          
ability to retain or attract customers.                                         

In addition, these defects could interrupt or delay sales. We may have
to invest significant capital and other resources to correct these problems.    
If any of these problems are not found until after we have commenced            
commercial production of a new product, we might incur substantial additional   
development costs. If we fail to provide solutions to the problems, such as     
upgrades or patches, we could also incur product recall, repair or              
replacement costs. These problems might also result in claims against us by     
our customers or others. In addition, these problems may divert our technical   
and other resources from other development efforts. Moreover, we would likely   
lose, or experience a delay in, market acceptance of the affected product or    
products, and we could lose credibility with our current and prospective        
customers.                                                                      

Our products may infringe upon the intellectual property rights of others,      
which may require us to pay significant license fees, prevent us from selling   
our products, and/or may cause us to become subject to expensive litigation     
or incur damages.                                                               

Our industry is characterized by the existence of a large number of   
patents and frequent claims and related litigation regarding patent and other   
intellectual property rights. We cannot be sure that our products do not and    
will not infringe upon issued patents or other intellectual property rights     
of others. Historically, patent applications in the United States have not      
been publicly disclosed until the patent is issued, and we may not be aware     
of filed patent applications that relate to our products or technology. If      
patents later issue on these applications, we may be liable for infringement.   
In addition, leading companies in the software industry have extensive          
portfolios with respect to software technology. From time to time, third        
parties, including these leading companies, may assert exclusive patent,        
copyright, trademark and other intellectual property rights to technologies     
and related methods that are important to us. We expect that we may become      
subject to infringement claims as the number of products and competitors in     
our target markets grows and the functionality of products overlaps.            
Litigation may be necessary in the future to enforce our intellectual           
property rights, to protect our trade secrets, to determine the validity and    
scope of the proprietary rights of others or to defend against claims of        
infringement or invalidity. We may also be subject to claims from customers     

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for indemnification. Any resulting litigation could result in substantial       
costs and diversion of resources.                                               

If it were determined that our products infringe upon the intellectual
property rights of others, we would need to obtain licenses from these          
parties or substantially re-engineer our products in order to avoid             
infringement. We might not be able to obtain the necessary licenses on          
acceptable terms or at all, or to re-engineer our products successfully.        
Moreover, if we are sued for infringement and lose the suit, we could be        
required to pay substantial damages or enjoined from licensing or using the     
infringing products or technology. Any of the foregoing could cause us to       
incur significant costs and prevent us from selling our products.               

Apple Computer, Inc. may try to stop us from continuing our business by         
filing infringement claims or other legal actions, which would severely         
hamper our ability to continue to license or sell our products.                 

  If we are seen as a threat to Apple they could sue us to attempt to stop
us from producing any more of our products.  We have produced our software      
independent of all Apple source code, relying merely on published               
documentation accessible to all third-party software developers.  Neither       
Clifford Matthews, our president and founder, nor any of ARDI's employees,      
contractors or contributors have ever been employed by Apple.  To document      
its independent development effort, ARDI maintains hundreds of pages of hand-   
written notes, describing early design issues.  More significantly, ARDI can    
fully document the evolution of its software, dating back to 1986, and has      
written its software in a language different from that used by Apple.           
However, should Apple choose to sue us it could have a severe adverse effect    
on our business and plan of operation.                                          

Our failure to protect our proprietary rights, or the costs of protecting       
these rights, may harm our ability to compete.                                  

We believe that our success will depend in part upon our proprietary  
technology. We rely on a combination of copyrights, trademarks, trade secret    
laws and contractual obligations with employees and third parties to protect    
our proprietary rights. These legal protections provide only limited            
protection and may be time consuming and expensive to obtain and enforce. Our   
failure to adequately protect our proprietary rights could result in            
competitors offering similar products and impair our ability to compete.        
Moreover, despite our efforts to protect our proprietary rights, unauthorized   
parties may copy aspects of our products and obtain and use information that    
we regard as proprietary. Also, our competitors may independently develop       
similar, but not infringing, technology, duplicate our products, or design      
around our intellectual property. In addition, other parties may breach         
confidentiality agreements or other protective contracts with us, and we may    
not be able to enforce our rights in the event of these breaches.               
Furthermore, we expect that we will increase our international operations in    
the future, and the laws of many foreign countries do not protect our           
intellectual property rights to the same extent as the laws of the United       
States.                                                                         

We operate in a sub-section of the highly competitive computer software         
market and may not be able to compete effectively, which could result in        
additional financial losses to us.                                              

 We expect that if we are successful in our strategy to expand the scope
of our products and services, we may encounter many additional market-          
specific competitors. In addition, because there are relatively low barriers    
to entry in the software market, we expect additional competition from          
reverse-engineering software developers that may have not previously focused    
on the Macintosh. Some of these companies, as well as some other competitors,   
may have longer operating histories, significantly greater financial,           
technical, marketing and other resources, significantly greater name            

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recognition and a larger installed base of customers than we have. As a         
result, our competitors may be able to respond more quickly to new or           
emerging technologies and changes in customer requirements, devote greater      
resources to the development, promotion and sale of their products, or adopt    
more aggressive pricing policies to gain market share. In addition, current     
and potential competitors have established or may establish cooperative         
relationships among themselves or with third parties to increase the ability    
of their products to address customer needs. Accordingly, it is possible that   
new competitors or alliances among competitors may emerge and rapidly acquire   
significant market share. We also expect that competition will increase as a    
result of software industry consolidations.                                     

Increased competition is likely to result in price reductions, reduced gross    
margins and loss of market share, any of which could seriously harm our         
business, financial condition and results of operations. We may not be able     
to compete successfully against current and future competitors, in which case   
our business could suffer, resulting in more significant financial losses.      

Our operating results are difficult to predict in advance and may fluctuate     
significantly. If our common stock becomes publicly traded, a failure to meet   
the expectations of analysts or our stockholders would likely result in a       
substantial decline in our stock price.                                         

There is little historical financial information that is useful in    
evaluating our business, prospects and future operating results. You should     
not rely on quarter-to-quarter comparisons of our results of operations as an   
indication of our future performance. We expect our future operating results    
to fluctuate significantly from quarter to quarter. If our operating results    
fail to meet or exceed the expectations of analysts or investors, our stock     
price would likely decline substantially. Factors that are likely to cause      
our results to fluctuate include the following:                                 

*    the gain or loss of significant customers or significant changes in        
purchasing volume;                                                    
*    the amount and timing of our operating expenses and capital                
expenditures;                                                         
*    changes in the volume of our product sales and pricing concessions on      
volume sales;                                                         
*    the timing, rescheduling or cancellation of customer orders;               
*    the varying length of our sales cycles;                                    
*    the availability and pricing of competing products and technologies and    
the resulting effect on sales and pricing of our products;            
*    our ability to specify, develop, complete, introduce and market new        
   products and technologies and bring them to volume production in a timely
manner;                                                               
*    the rate of adoption and acceptance of new industry standards in our       
target markets;                                                       
*    the effectiveness of our product cost reduction efforts and those of our   
suppliers;                                                            
*    changes in the mix of products we sell; and                                
*    changes in the average selling prices of our products.                     

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We are highly dependent on Clifford T. Matthews, our CEO and founder. The       
loss of Mr. Matthews, whose knowledge, leadership and technical expertise       
upon which we rely, would harm our ability to execute our business plan.        

  Our success depends heavily upon the continued contributions of Clifford
T. Matthews, our CEO and founder, whose knowledge, leadership and technical     
expertise would be difficult to replace. Mr. Matthews is employed at-will. We   
have no employment contract and maintain no key person insurance on Mr.         
Matthews. If we were to lose his services, our ability to execute our           
business plan would be harmed.                                                  

If we are unable to recruit, hire, train and retain additional sales,           
marketing, operations, engineering and finance personnel, our growth will be    
impaired.                                                                       

 To grow our business successfully and maintain a high level of quality,
we will need to recruit, retain and motivate additional highly-skilled sales,   
marketing, engineering and finance personnel. If we are not able to hire,       
train and retain a sufficient number of qualified employees, our growth will    
be impaired. In particular, we will need to expand our sales and marketing      
organizations in order to increase market awareness of our products and to      
increase revenue.                                                               

In addition, as a company focused on the development of complex       
products, we will need to hire additional engineering staff of various          
experience levels in order to meet our product roadmap. The market for          
skilled employees is extremely limited. We may have even greater difficulty     
recruiting potential employees after this offering if prospective employees     
perceive the equity component of our compensation package to be less valuable   
after this offering than before this offering.                                  

We are subject to various risks associated with technological change and if     
we do not adapt our products to these changes our business will be adversely    
affected through decreased gross product margins and loss of market share.      

  The  computer  software  market involves numerous  characteristics  that
expose   our   existing  and  future  technologies,  service  practices   and   
methodologies to the risk of obsolescence. These characteristics included the   
following:                                                                      

*    rapid changes in technology;                                               
*    rapid changes in user and customer requirements;                           
*    frequent new service or product introductions embodying new                
technologies; and                                                     
*    the emergence of new industry standards and practices.                     

  Our  performance will partially depend on our ability to license leading
technologies,  enhance  our existing services, and respond  to  technological   
advances and emerging industry standards and practices on a timely and  cost-   
effective  basis.  The development of software entails significant  technical   
and  business  risks.  We  cannot predict if we  will  use  new  technologies   
effectively  or  adapt  our  products to  consumer,  vendor,  advertising  or   
emerging  industry  standards.  If  we were  unable,  for  technical,  legal,   
financial  or  other  reasons, to adapt in a timely  manner  in  response  to   
changing market conditions or customer requirements, our business, results of   
operations and financial condition could be materially adversely affected.      

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Risks Relating to This Offering:                                                

There is no current public market for our common stock, therefore investors     
in this offering will have a very limited ability to liquidate their            
investment for any reason.                                                      

As of the date of this prospectus, there is no public market for our  
common stock. At this time we have no plans to apply for listing our common     
stock on any quotation system or stock exchange. If we do become listed with    
respect to our common stock on a quotation system or stock exchange, there      
can be no assurance that a market will develop for the common stock or that a   
market in the common stock will be maintained. As a result, investors may be    
unable to liquidate their investment for any reason.                            

Due to our low book value, investors in this offering will incur substantial    
immediate dilution of up to $4.04 per share.                                    

 Investors who purchase shares of common stock in this offering will pay
a per share price that substantially exceeds the value of our assets after      
subtracting liabilities. Accordingly, the offering price is substantially       
higher than the book value per share of our outstanding common stock. As a      
result, an investor who acquires shares of common stock in this offering will   
incur immediate substantial dilution of approximately $4.04 per share if the    
minimum offering is achieved and $3.57 per share if the maximum offering is     
achieved. See "Dilution" for a more detailed description of how new             
shareholders will incur dilution.                                               

Because our common stock may be deemed a low-priced "Penny" stock, an           
investment in our common stock should be considered high risk and subject to    
marketability restrictions.                                                     

  Our common stock may become subject to "penny stock" rules and if so our
shareholders will in all likelihood find it difficult to sell their common      
stock.                                                                          

If the trading price of the common stock falls below $5.00 per share, 
trading in the common stock would become subject to various rules under the     
Securities Exchange Act of 1934 which require additional disclosure by broker-  
dealers in connection with any trades involving a stock defined as a penny      
stock (generally, any equity security that has a market price of less than      
$5.00 per share). Such rules require the delivery, prior to any penny stock     
transaction, of a disclosure schedule explaining the penny stock market and     
the risks associated therewith, and impose various sales practice               
requirements on broker-dealers who sell penny stocks to persons other than      
established customers and accredited investors. For these types of              
transactions, the broker-dealer must make a special suitability determination   
for the purchaser and have received the purchaser's written consent to the      
transaction prior to sale. The additional burdens imposed upon broker-dealers   
by such requirements may discourage them from effecting transactions in the     
common stock, thereby severely limiting the market liquidity of the common      
stock and the ability of purchasers in this offering to sell common stock in    
the secondary market.                                                           

Clifford Matthews, our president, director and founder, holds a majority of     
our common stock, therefore investors will have minimal influence on            
shareholder decisions.                                                          

Clifford Matthews beneficially owns 1,553,000 shares or 65% of our    
common stock. He will not purchase shares in the offering.  If the minimum      
number of shares is sold, he will own 52% of the outstanding shares. If the     
maximum number of shares is sold, he will own 46% of the outstanding shares.    
In the case of the minimum offering, Mr. Matthews has and will continue to      
have the ability to control our management policies and decisions as well as    
issues that require a shareholder vote. Mr. Matthews can control the outcome    

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of certain corporate actions requiring shareholder approval, including the      
election of directors and the approval or non-approval of significant           
corporate transactions, such as the merger or sale of all or substantially      
all of our assets. His interests may differ from the interests of other         
shareholders with respect to management issues.                                 

If we need additional financing, we may not be able to raise further            
financing or it may only be available on terms unfavorable to us or our         
stockholders, which may result in our inability to fund our working capital     
requirements and harm our operational results.                                  

We believe that our available cash resources, combined with the net   
proceeds from this offering, will be sufficient to meet our anticipated         
working capital and capital expenditure requirements for at least twelve        
months after the date of this prospectus. We might need to raise additional     
funds, however, to respond to business contingencies, which could include the   
need to:                                                                        

*    fund more rapid expansion;                                                 
*    fund additional marketing expenditures;                                    
*    develop new products or enhance existing products;                         
*    enhance our operating infrastructure;                                      
*    hire additional personnel;                                                 
*    respond to competitive pressures; or                                       
*    acquire complementary businesses or technologies.                          

If we raise additional funds through the issuance of equity or        
convertible debt securities, the percentage ownership of our stockholders       
would be reduced, and these newly issued securities might have rights,          
preferences or privileges senior to those of existing stockholders, including   
those acquiring shares in this offering. Additional financing might not be      
available on terms favorable to us, or at all. If adequate funds were not       
available or were not available on acceptable terms, our ability to fund our    
operations, take advantage of unanticipated opportunities, develop or enhance   
our products or otherwise respond to competitive pressures would be             
significantly limited.                                                          

Since this is a direct public offering with no underwriter, we may not be       
able to sell any shares. If we do not sell any shares or enough to reach the    
minimum offering amount, we will be forced to seek other financing to expand    
our operations.                                                                 

We have not retained an underwriter to sell any of our shares.  We are
conducting this offering as a direct public offering, which means there is no   
guarantee as to how much money we will be able to raise or if we will           
successfully sell any of the shares in this offering or if we do sell shares    
that we will successfully meet our 600,000 share minimum.  Our officer and      
director, Clifford Matthews, will be selling the shares and has no prior        
experience in selling securities.  If he fails to sell at least the minimum     
number of shares offered in this prospectus, our ability to implement our       
business plan will be materially effected and we will be forced to seek other   
methods of financing.                                                           

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About this Prospectus                                                           

You should only rely on the information contained in this prospectus. 
We have not authorized anyone to provide information different from that        
contained in this prospectus.  We are offering to sell, and seeking offers to   
buy, shares of our common stock only in jurisdictions where offers and sales    
are permitted.                                                                  

Available Information                                                           

We are not subject to the informational requirements of the Securities
Exchange Act of 1934. Once our securities are registered under the Securities   
Exchange Act of 1934, we will file reports and other information with the       
Securities and Exchange Commission.  We intend to register our securities       
under Section 12(g) of the Exchange Act.  Once our registration statement       
becomes effective we shall file supplementary and periodic information,         
documents and reports that are required under section 13 of the Securities      
Act of 1933.  Such reports, proxy statements and other information can be       
inspected and copied at the public reference facility maintained by the SEC     
at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549. Information       
regarding the public reference facilities may be obtained from the SEC by       
telephoning 1-800-SEC-0330. Our filings are also available to the public        
through the SEC's Electronic Data Gathering Analysis and Retrieval System       
which is publicly available through the SEC's website http://www.sec.gov.       
Copies of such materials may also be obtained by mail from the Public           
Reference Section of the SEC at 450 Fifth Street, N.W., Washington, D.C.        
20549 at prescribed rates.                                                      

We intend to furnish to our stockholders annual reports containing    
financial statements audited by our independent certified public accountants    
and quarterly reports containing unaudited interim financial statements for     
the first three-quarters of each fiscal year.                                   

 We have filed with the Commission a registration statement on Form SB-2
under the Securities Act of 1933 with respect to the securities offered in      
this prospectus. This prospectus does not contain all the information set       
forth in the registration statement, certain parts of which are omitted in      
accordance with the rules and regulations of the SEC. For further information   
with respect to us and the common stock offered in this prospectus, reference   
is made to such registration statement, exhibits and schedules. Statements      
contained in this prospectus as to the contents of any contract or other        
document referred to are not necessarily complete and in each instance          
reference is made to the copy of such contract or other document filed as an    
exhibit to the registration statement, each such statement being qualified in   
all respects by such reference.  A copy of the registration statement,          
including the exhibits and schedules, may be reviewed and copied at the SEC's   
public reference facilities or through the SEC's EDGAR website.                 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS   

Some of the statements under "Prospectus Summary", "Risk Factors",    
"Management's Discussion and Analysis of Financial Condition and Results of     
Operations", "Description of Business", and elsewhere in this prospectus        
constitute forward-looking statements. In some cases, you can identify          
forward-looking statements by terminology such as "may", "will", "should",      
"expects", "plans", "anticipates", "believes", "estimated", "predicts",         
"potential", or "continue" or the negative of such terms or other comparable    
terminology. These statements are only predictions and involve known and        
unknown risks, uncertainties, and other factors that may cause our actual       
results, levels of activity, performance, or achievements to be materially      
different from any future results, levels of activity, performance, or          
achievements expressed or implied by such forward-looking statements. These     
factors include, among other things, those listed under "Risk Factors",         
"Management's Discussion and Analysis of Financial Condition and Results of     
Operations" and elsewhere in this prospectus. Although we believe that the      
expectations reflected in the forward-looking statements are reasonable, we     

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cannot guarantee future results, levels of activity, performance, or            
achievements. We are under no duty to update any of the forward-looking         
statements after the date of this prospectus to conform forward-looking         
statements to actual results.                                                   

USE OF PROCEEDS   

  The  amounts and timing of expenditures described in the table for  each
purpose  may  vary  significantly depending on numerous  factors,  including,   
without  limitation, the progress of our marketing, distribution and  further   
development of our products and services, competing technological and  market   
developments, changes in our existing research relationships, our ability  to   
establish  collaborative  arrangements, the initiation  of  commercialization   
activities and the availability of other financing. We anticipate,  based  on   
currently proposed plans and assumptions relating to our operations, that our   
available  cash  and  short-term investments, the maximum  proceeds  of  this   
offering  and cash flow from operations, if any, will be adequate to  satisfy   
our  capital  needs  for at least 12 months following  consummation  of  this   
offering.                                                                       

   The proceeds from the sale of the shares of common stock offered hereby
are  estimated  to  be  approximately $3,000,000  upon  meeting  the  minimum   
offering  and approximately $5,000,000 upon meeting the maximum offering.  We   
intend  to  utilize  the estimated net proceeds during  the  12-month  period   
following this offering for the following purposes:                             

                                                                [Download Table]
                                                     Minimum       Maximum  
                                                      Amount       Amount   
                                                                            
Total Proceeds                                      $3,000,000   $5,000,000 

Less: Offering Expenses                                                     
 Legal                                               $25,000       $25,000  
 Accounting                                           $5,000       $5,000   
    Copying, Printing & Advertising                  $15,000       $15,000  
    SEC Filing Fee                                    $1,250       $1,250   
    Other expenses                                    $3,750       $3,750   
                                                   ------------ ------------
Net Proceeds from Offering                          $2,950,000   $4,950,000 
                                                   ============ ============
Use of Net Proceeds                                                         

     Research and Development; including                                    
        dirty-room/clean-room reverse engineering   $1,000,000   $1,400,000 
     Sales & Marketing                               $650,000     $750,000  
     Executive                                       $300,000     $300,000  
     Technical Support & Internal Engineering        $200,000     $200,000  
     General & Administrative                        $150,000     $150,000  

     Working Capital                                 $650,000    $2,150,000 
                                                   ------------ ------------
Total Use of Net Proceeds                           $3,000,000   $5,000,000 

We intend to apply the balance of the proceeds of the offering to     
working capital.  Our management will have broad discretion with respect to     

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the use of proceeds retained as working capital. Such proceeds may be used to   
defray overhead expenses, purchase capital equipment, fund expansion and        
negative cash flow positions and for future opportunities and contingencies     
that may arise.                                                                 
DETERMINATION OF OFFERING PRICE   

 We have arbitrarily determined the initial public offering price of the
shares.  We considered several factors in such determination.  Including the    
following:                                                                      

*    prevailing market conditions, including the history and prospects for      
the industry in which we compete;                                     
*    our future prospects; and                                                  
*    our capital structure.                                                     

 Therefore, the public offering price of the shares does not necessarily
bear any relationship to established valuation criteria and may not be          
indicative of prices that may prevail at any time or from time to time in the   
public market for the common stock.  You cannot be sure that a public market    
for any of our securities will develop and continue or that the securities      
will ever trade at a price at or higher than the offering price in this         
offering.                                                                       

DILUTION    

The difference between our initial public offering price per share of 
common stock and the pro forma net tangible book value per share of common      
stock after this offering constitutes the dilution to investors in this         
offering.  Our net tangible book value per share is determined by dividing      
our net tangible book value (total tangible assets less total liabilities) by   
the number of outstanding shares of common stock.                               

At March 31, 2002 our common stock had a pro forma net tangible book  
value of approximately $(85,999) or $(0.04) per share.  After giving effect     
to the receipt of the net proceeds from the minimum and maximum offering        
offered in this prospectus at an assumed initial offering price of $5.00 per    
share, our pro forma net tangible book value at March 31, 2002, would have      
been $2,864,001 or $0.96 per share in the minimum offering and $4,864,001 or    
$1.43 per share in the maximum offering. This represents an immediate           
increase in net tangible book value to our present stockholders of $0.99 in     
the minimum offering and $1.47 per share in the maximum offering. This          
results in immediate dilution per share to investors of $4.04 or 80.87% in      
the minimum offering and $3.57 or 71.34% in the maximum offering.   The         
following table illustrates dilution to investors on a per share basis:         

                                                                [Download Table]
                                                            Minimum  Maximum
                                                                            
Offering price per share...                                   $5.00    $5.00
Net tangible book value per share before offering.          $(0.04)  $(0.04)
Increase per share attributable to investors.                 $0.99    $1.47
Pro forma net tangible book value per share after offering.   $0.96    $1.43

Dilution per share to investors.                              $4.04    $3.57


The following table summarizes, as of March 31, 2002 the difference   
between the number of shares of common stock purchased from us, the total       
cash consideration paid and the average price per share paid by existing        

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stockholders of common stock and by the new investors purchasing shares in      
this offering.  The table assumes the sale of the 1,000,000 shares maximum      
offered in this prospectus at an assumed initial public offering price of       
$5.00 per share and before any deduction of estimated offering expenses.        

                                                                [Download Table]
                                                                    Average
                                                                     Price 
                                                   Total Cash         Per  
                             Shares Purchased     Consideration      Share 
                             Amount   Percent    Amount    Percent         
                                                                           
Original Stockholders       2,393,770   71%    $1,569,819  23.89%    $0.66 
Public Stockholders         1,000,000   29%    $5,000,000  76.11%    $5.00 
                            --------- -------  ----------  -------         
     Total                  3,393,770   100%   $6,569,819   100%           
                            ========= =======  ==========  =======         

PLAN OF DISTRIBUTION AND TERMS OF THE OFFERING    

 This is a "direct public" offering. We will not receive any proceeds of
the offering unless we sell shares equal to the minimum offering amount. If     
the minimum offering is not sold, subscribers will lose the use of their        
funds for the offering period expiring on January 1, 2003; the funds invested   
by them will be promptly returned to the subscribers at the end of the          
offering without interest and without deduction.                                

We are offering a minimum six hundred thousand (600,000) shares and a 
maximum of one million (1,000,000) shares, at five dollars ($5.00) per share.   
We can give no assurance that the minimum number of shares will be sold.  If    
subscriptions are received for fewer than 600,000 shares, no shares will be     
sold.                                                                           

 Funds received prior to reaching the 600,000 share minimum will be held
in a escrow account at Sunwest Escrow, LC and will not be released to us        
until the minimum offering is achieved.                                         

If we do not sell at least the minimum of 600,000 shares by January 1,
2003, the offering will terminate and all money paid for shares will be         
promptly returned to the purchasers, without interest and without deduction.    

If we were to be unsuccessful in achieving the minimum offering,
funds will be redistributed to all investors who have purchased the shares      
offered in this prospectus.  Upon achieving the minimum offering and the        
acceptance of a subscription for shares, our transfer agent will issue the      
shares to the purchasers.  We may continue to offer shares through January 1,   
2003 or until we have sold all of the securities offered in this prospectus.    
During the offering period, no subscriber will be entitled to any refund of     
any subscription.                                                               

We will sell the shares on a "direct public offering basis" through   
Clifford Matthews, our chairman and president, who will not receive any         
compensation in connection with the sale of shares, although we will            
reimburse him for expenses incurred in connection with the offer and sale of    
the shares.  He will be relying on Rule 3a4-1 of the Exchange Act as a "safe    
harbor" from registration as a broker-dealer in connection with the offer and   
sale of the shares.  In order to rely on such  "safe harbor" provisions         
provided by Rule 3a4-1, he must be in compliance with all of the following:     

*    he must not be subject to a statutory disqualification;                    
*    he must not be compensated in connection with such selling participation   
by payment of commissions or other payments based either directly or  
indirectly on such transactions;                                      
*    he must not be an associated person of a broker-dealer;                    

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*    he must  restrict  participation to transactions involving offers and      
sale of the shares;                                                             
*    he must perform substantial duties for the issuer after the close of the   
offering not connected with  transactions  in securities, and not have  been    
associated  with a broker  or dealer for the preceding 12 months, and not       
participate  in selling an  offering  of  securities for any issuer more than   
once every 12 months; and                                                       
*    he must restrict participation to written communications or responses to   
inquiries of potential purchasers.                                              

Mr. Matthews intends to comply with the guidelines enumerated in Rule 
3a4-1.                                                                          

  None of our officers or directors have the ability to purchase shares in
this offering.                                                                  

Terms of the Offering:                                                          

The proceeds of this offering will be held in an escrow account with  
Sunwest Escrow, LC.  The escrow account has been established for the sole       
purpose of depositing the funds received prior to achieving the minimum         
offering amount of shares. Once the minimum offering is completed and the       
funds are released to us the escrow account will be promptly closed.            

You may purchase shares by completing and manually executing the      
subscription agreement attached to this Prospectus and delivering it with       
your payment in full for all shares that you wish to purchase to our offices.   
All payments are to be made by cash, check or money order payable only to:      
"SUNWEST ESCROW". Your subscription shall not become effective until accepted   
by us and approved by our counsel.                                              

LITIGATION    

  We may from time to time be involved in routine legal matters incidental
to our business; however, at this point in time we are currently not involved   
in any litigation, nor are we aware of any threatened or impending              
litigation.                                                                     

MANAGEMENT    

The members of our board of directors serve for one year terms and are
elected at the next annual meeting of stockholders, or until their successors   
have been elected.  The officers serve at the pleasure of the board of          
directors.  Information as to the directors and executive officers are as       
follows:                                                                        

Name                          Age   Title                                       

Clifford T. Matthews           39   President, CEO, Secretary, Director         
Irvin Metelitis                66   Treasurer                                   
Michael Angst                  35   Director                                    
Leonard Hall                   54   Director                                    

Duties, Responsibilities and Experience                                         

Clifford T. Matthews, president, CEO, secretary and a director of ARDI,         
received his M.S.C.S from the University of New Mexico in 1985.  His emphasis   
was on operating systems and programming languages. Matthews began              
programming when he was 13 years old and was programming professionally at      
16. Mr. Matthews has served as our chairman of the board since our inception    
in 1989.                                                                        

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Matthews began working on Macintosh emulation in July of 1986 founding ARDI.    
Matthews wrote the core library routines that are at the heart of Executor      
and Carbonless Copies.  Matthews created the first version of Executor on a     
Sun3 computer and did the first port of Executor, from the Sun3 to a NeXT       
running NEXTSTEP.                                                               

During the first few years of Macintosh emulation work, Matthews continued to   
occasionally work as a consultant.  At CompuGraphics, Matthews developed        
software that solved specific graphics problems by using pipelined digital      
processors.  Matthews designed and prototyped an electronic communication       
system for Salomon Brothers when they switched to UNIX systems in 1989.         

Irvin Metelitis, treasurer of ARDI, has been a Certified Public Accountant      
for the past 35 years and specializes in advising clients in financial          
matters, tax planning, estate planning and tax preparation.                     

Michael Angst, a director of ARDI, has been employed as the COO of National     
Healthcare Resources, Inc. since 1996. Mr. Angst also has numerous years        
experience in the financial and technology industries. Mr. Angst received his   
B.S. in Engineering from the University of Pennsylvania in 1988. Mr. Angst      
has been a director of ARDI since March 2001.                                   

Leonard Hall, Ph.D, a director of ARDI, brings more than 30 years of            
successful administration of education programs in the public sector and was    
a founder and senior vice president of a start-up software company. That        
company, Skillsbank Corporation, was started in 1986 through a limited          
private stock placement and was subsequently acquired by the Learning Company   
in 1997. Mr. Hall has been a director of ARDI since March 2001.                 

PRINCIPAL STOCKHOLDERS    

The following table sets forth information as of the date of this     
prospectus, and as adjusted giving effect to the sale of 600,000 shares         
minimum and 1,000,000 shares maximum of common stock in this offering,          
relating to the beneficial ownership of our common stock by those persons       
known to us to beneficially own more than 5% of our capital stock, by each of   
our directors, proposed directors and executive officers, and by all of our     
directors, proposed directors and executive officers as a group. The address    
of each person is care of ARDI.                                                 

                                                                [Download Table]
                                                        Percent    Percent 
                                              Percent    After      After  
                                    Number     Before   Offering   Offering
    Name of Beneficial Owner       Of Shares  Offering (Minimum)  (Maximum)
                                                                           
Clifford T. Matthews (1)           1,553,000    65%       52%        46%   
Irvin Metelitis                     16,400       1%        1%         1%   
Michael Angst (2)                   50,000       1%        1%         1%   
Leonard Hall (3)                    50,000       1%        1%         1%   
Mathew Hostetter                    336,070     14%       11%        10%   
                                   ---------  -------  ---------  ---------
All Directors, Officers and                                                
Principle Stockholders as a Group  1,955,470    82%       66%        59%   

"Beneficial ownership" means the sole or shared power to vote or to   
direct the voting of, a security, or the sole or shared investment power with   
respect to a security (i.e., the power to dispose of or to direct the           
disposition of, a security).  In addition, for purposes of this table, a        
person is deemed, as of any date, to have "beneficial ownership" of any         
security that such person has the right to acquire within 60 days from the      
date of this prospectus.                                                        

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(1)  On  March  23,  2001, Mr. Matthews was granted  50,000  options  to        
purchase common shares at a price of $1.25 per share.                 
(2)  On March 23, 2001, Mr. Angst was granted 50,000 options to purchase        
common shares at a price of $1.25 per share.                          
(3)  On  March 23, 2001, Mr. Hall was granted 50,000 options to purchase        
common shares at a price of $1.25 per share.                          

DESCRIPTION OF SECURITIES   

Common Stock                                                                    

Our certificate of incorporation authorizes the issuance of 6,000,000 
shares of common stock, $0.001 par value per share, of which 2,393,770 shares   
were outstanding as of the date of this prospectus. Upon sale of the 600,000    
shares minimum and 1,000,000 share maximum, we will have outstanding            
2,993,770 or 3,393,770 shares of common stock, respectively.  Holders of        
shares of common stock are entitled to one vote for each share on all matters   
to be voted on by the stockholders.  Holders of common stock have no            
cumulative voting rights. Holders of shares of common stock are entitled to     
share ratably in dividends, if any, as may be declared, from time to time by    
the board of directors in its discretion, from funds legally available to be    
distributed.  In the event of a liquidation, dissolution or winding up of       
ARDI, the holders of shares of common stock are entitled to share pro rata      
all assets remaining after payment in full of all liabilities. Holders of       
common stock have no preemptive rights to purchase our common stock.  There     
are no conversion rights or redemption or sinking fund provisions with          
respect to the common stock.  All of the outstanding shares of common stock     
are validly issued, fully paid and non-assessable.                              

LEGAL MATTERS   

 The legality of the shares offered hereby will be passed upon for us by
Stoecklein Law Group, 402 West Broadway, Suite 400, San Diego, California       
92101.                                                                          

EXPERTS   

 The financial statements of ARDI as of September 30, 2001 and September
30, 2000 are included in this prospectus and have been audited by Weaver &      
Martin, LLC, an independent auditor, as set forth in their report appearing     
elsewhere in this prospectus and are included in reliance upon such reports     
given upon the authority of such individual as an expert in accounting and      
auditing.                                                                       

DISCLOSURE OF COMMISSION    
POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES    

No director of ARDI will have personal liability to us or any of our  
stockholders for monetary damages for breach of fiduciary duty as a director    
involving any act or omission of any director since provisions have been made   
in the certificate of incorporation limiting liability. The foregoing           
provisions shall not eliminate or limit the liability of a director for:        

*    any breach of the director's duty of loyalty to us or our stockholders     
*    acts or omissions not in good faith or, which involve intentional          
misconduct or a knowing violation of law                                        
*    or under applicable Sections of the Delaware Revised Statutes or,          
*    for any transaction from which the director derived an improper personal   
benefit.                                                                        

The Bylaws provide for indemnification of our directors, officers, and
employees in most cases for any liability suffered by them or arising out of    

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their activities as directors, officers, and employees if they were not         
engaged in willful misfeasance or malfeasance in the performance of their       
duties; provided that in the event of a settlement the indemnification will     
apply only when the board of directors approves settlement and reimbursement    
as being for our best interests.                                                

Our officers and directors are accountable to us as fiduciaries, which
means they are required to exercise good faith and fairness in all dealings     
affecting ARDI. In the event that a stockholder believes the officers and/or    
directors have violated their fiduciary duties, the stockholder may, subject    
to applicable rules of civil procedure, be able to bring a class action or      
derivative suit to enforce the stockholder's rights, including rights under     
federal and state securities laws and regulations to recover damages from and   
require an accounting by management. Stockholders who have suffered losses in   
connection with the purchase or sale of their interest in ARDI in connection    
with a sale or purchase, including the misapplication by any officer or         
director of the proceeds from the sale of these securities, may be able to      
recover losses from us.                                                         

We undertake the following:                                                     

 Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Act") may be permitted to our directors, officers and         
controlling persons pursuant to the foregoing provisions, or otherwise, we      
have been advised that in the opinion of the Securities and Exchange            
Commission this type of indemnification is against public policy as expressed   
in the Act and is unenforceable.                                                

OUR BUSINESS    

Definitions,Comparisons and Distinctions                                        

ARDI's goal is to be a leader in emulation software.  ARDI's most     
technically sophisticated work to date has been its software that allows        
certain classes of Macintosh applications to run on PCs.  In order to           
describe ARDI's accomplishments and the challenges facing ARDI, this            
prospectus uses some industry-specific terms.  This section of the prospectus   
provides definitions of these terms as well as comparisons to similar terms     
and important distinctions that relate to ARDI's business.                      

Emulation                                                                       

ARDI develops computer software.  The type of computer software that  
ARDI creates is emulation software.  Emulation is the ability to perform a      
task or function that is normally provided by something else.  Emulation        
software can be packaged for use by computer users, computer programmers and    
computer manufacturers.  ARDI's emulation software is currently packaged for    
use by computer users as ARDI's Executor product line and for use by            
programmers as ARDI's Carbonless Copies product line.  ARDI does not yet        
package its emulation software for use by computer manufacturers.               

CPU Emulation                                                                   

 One type of emulation software is CPU emulation.  Inside every computer
is at least one Central Processing Unit (CPU).  CPUs are the part of            
computers that perform computation.  CPUs retrieve instructions from memory     
and execute (perform what the instruction specifies) these instructions at      
rates of hundreds of millions of these simple instructions per second.  The     
engineers who design CPUs decide the format of the instructions that a given    
CPU will use.  IBM-compatible PCs use Intel 80x86-compatible CPUs such as       
Intel's Pentium and Celeron line and AMD's Athlon and Duron line of CPUs.       
Macintosh computers have never used Intel 80x86-compatible CPUs; the original   
Macintosh used Motorola 680x0 CPUs and current Macintoshes use Motorola & IBM   
PowerPC CPUs.  CPU emulation software allows a CPU to execute instructions      
that are otherwise incompatible with that CPU.                                  

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OS Emulation                                                                    

Another type of emulation software is Operating System (OS) emulation.
Operating Systems are collections of instructions that provide a set of         
routines to the programs that run on the computer.  Typically OS routines are   
grouped into layers, where the lowest layers directly interact with the         
computer hardware and where higher layers interact with lower layers.           
Maintaining layers reduces the complexity of developing, debugging and          
updating the OS.  In IBM-compatible PCs, the lowest layer is known as the       
BIOS (Basic Input/Output System).  OS emulation software allows a computer to   
provide routines that are not normally provided by the OS that comes with the   
computer.  In some cases OS emulation replaces all the layers of an OS.  In     
other cases, only certain layers are replaced.                                  

Platform                                                                        

A combination of computer hardware and an operating system is called a
platform.  For example, an IBM-compatible PC running Microsoft's Windows XP     
Operating System is a different platform than the same PC running the Linux     
operating system.  Computer software is traditionally released for particular   
platforms.  Running computer software on a platform for which it was not        
developed may require emulation.  Whereas engineering considerations dictate    
when CPU emulation is needed, licensing considerations dictate when OS          
emulation is needed.  When the IBM PC was cloned, for example, the cloners      
didn't need CPU emulation, but did need their own BIOS implementation. This     
was because PC clone makers could purchase the same CPU for their clones as     
IBM used in their PCs, but IBM did not license the BIOS.  Although IBM didn't   
license their BIOS, Microsoft did license the rest of the operating system,     
DOS and later Windows, for use in clones.  Apple does not license any of        
their Classic Macintosh Operating System for use in clones.  ARDI's             
technology and experience in CPU and OS emulation will allow ARDI to create     
Macintosh emulation software that takes platform distinctions into account.     

Reverse Engineering                                                             

 Reverse engineering is a development method that uses information about
an existing entity to produce a new entity that has some of the same            
properties of the existing entity.  For example, ARDI has reverse-engineered    
the Motorola 680LC040 CPU and has also reverse-engineered 1,200 Macintosh       
Classic Operating System routines.  In other words, by using information        
about the 680LC040 CPU and about the Macintosh Classic Operating System, ARDI   
has produced software that performs enough of the same functions of the CPU     
and the Operating System to run hundreds of Macintosh programs.                 

Clean-Room Reverse Engineering                                                  

Software that is created that is functionally equivalent to other     
software is said to be Clean-Room Reverse Engineered if the creators avoid      
directly examining the software that is to be emulated.  This can be done by    
using published specifications and test programs.  Using clean-room reverse-    
engineering prevents the developers from including pieces of the software to    
be emulated in the emulated software.  It does not prevent the developers       
from infringing on patents or infringing on look-and-feel copyrights.  It can   
also be a labor intensive methodology because any behavior that either isn't    
documented in the publicly available specifications or that is incorrectly      
documented can cause the developers to write, run and analyze complex tests     
to determine the true behavior of the system being emulated.  Although          
Apple's Classic Macintosh Operating System is fairly well documented by Apple   
in Inside Macintosh series of books, each error and omission results has        
either resulted in an incompatibility in ARDI's software or the expenditure     
of time searching for better documentation or writing, running and analyzing    
test programs.                                                                  

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 Software that is created that is functionally equivalent to hardware is
said to be Clean-Room Reverse Engineered if the creators avoid looking at the   
hardware implementation.  In general, there is little need to examine the       
hardware implementation when emulating a CPU, because CPUs have well-defined    
specifications.                                                                 

Dirty-Room/Clean-Room Reverse Engineering                                       

Dirty-Room Engineering is where the thing being emulated is directly  
examined.  For example, looking at the individual instructions that make up a   
computer program, even if only to determine specifications that aren't          
publicly available, is an example of dirty-room reverse engineering.  Dirty-    
room reverse engineering done by the same engineers who create the emulation    
software runs the risk of deliberate or accidental copyright violations by      
incorporating portions of the software to be emulated in the emulator.  To      
avoid this risk, dirty-room reverse engineering can be done in conjuction       
with clean-room engineering by using two physically and electronically          
isolated teams where one team does dirty-room engineering and the other does    
clean-room engineering.  In strictly clean-room reverse engineering when it     
is determined that the specification that the clean-room engineers are          
working from is insufficient to produce the degree of compatibility desired,    
the only recourse is to search for additional documentation or to write tests   
that are run and analyzed in an effort to gain more information.  In Dirty-     
Room/Clean-Room Engineering, the clean-room engineers write a description of    
the portion of the specification that needs elaboration or clarification. The   
dirty-room engineers then use that request to create additional functional      
specifications.  These functional specifications should not reveal the way in   
which the emulated software has been written, or it would defeat the purpose    
of having separate clean-room and dirty-room engineers.  One way to prevent     
such things from occurring is to not allow the clean-room and dirty-room        
engineers to talk to each other.  Instead all communication between the two     
teams is passed through an intermediary who enforces the protocol that only     
functional specifications are passed from the clean-room to the dirty-room.     

For complex products, the number of man-hours needed to create an     
emulation using dirty-room/clean-room reverse engineering may be less than      
the number of man-hours needed to create an emulation using only clean-room     
reverse engineering.  This will be so when it is considerably easier for        
dirty-room engineers to determine hidden specifications, than it is for clean-  
room engineers to determine the same hidden specifications through the          
construction and analysis of tests.                                             

Strictly Clean-Room Reverse Engineering                                         

Because clean-room engineering can be used in conjunction with dirty- 
room engineering, a product is said to be produced as Strictly Clean-Room       
Reverse Engineered when no dirty-room engineering is used.  To date, ARDI has   
used strictly clean-room reverse engineering in constructing its software,      
even though doing so has been less efficient than using dirty-room/clean-room   
reverse engineering.  The benefit to ARDI of using strictly clean-room          
techniques is that ARDI has avoided the overhead of having separate dirty-      
room engineers and an intermediary.  The significant drawback has been that     
ARDI's lower operating system layers are not sufficiently compatible to allow   
Apple's upper operating system layers to work with them.  Such compatibility    
may be easier to provide using dirty-room/clean-room reverse engineering.       

Classic MacOS                                                                   

Apple first released the Macintosh in 1984.  The original Macintosh   
Operating System made hundreds of routines available to programmers to use in   
their Macintosh programs.  Over the years, Apple steadily added routines.       
Occasionally some routines that were previously supported were made             

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unavailable, but the overall structure of the Macintosh Operating System has    
stayed the same up through the release of MacOS 9, one of the two Operating     
Systems shipping on new Macintoshes sold by Apple in November 2001.  For        
example, the memory allocation routines "NewHandle" and "NewPtr" that were      
available to programmers in 1984 are still available under MacOS 9.  The        
1,200 Macintosh routines that ARDI has written are all Clasic MacOS routines.   

Mac OS X                                                                        

In December 1996, Apple bought NeXT Computers, Inc. and began revising
NeXT's OPENSTEP operating system for use on its Macintosh line.  In July 2001   
Apple began shipping MacOS X as well as MacOS 9 on all its new computers.       
MacOS X interacts with the hardware by using a freely available UNIX            
operating system core and provides three fundamentally different programming    
models to the programmers.  One model is the UNIX programming model; another    
is the Macintosh Classic programming model; the third is similar to the         
OPENSTEP programming model.  Programs can use routines from more than one       
programming model simultaneously.  ARDI's Macintosh compatibility software      
does not currently implement any of the routines made available in the UNIX     
or OPENSTEP-like programming models and is unlikely to ever directly do so.     

Business Overview                                                               

Emulation software's usefulness varies depending on the degree of     
compatibility of the emulation.  The Macintosh platform is continually          
updated by Apple.  Two major changes to the Macintosh platform have decreased   
the usefulness of ARDI's currently shipping Macintosh compatibility software.   
One change began in 1993 when Apple began manufacturing Macintoshes with        
PowerPC CPUs instead of 680x0 CPUs.  The other change began in 2000 when        
Apple began shipping MacOS X, an Operating System with a set of routines at     
its lowest layer which are different from all the Macintosh Operating Systems   
that preceded it.                                                               

To meet its business objectives, ARDI will have to develop a new      
synthetic CPU capable of emulating the PowerPC with sufficient compatibility    
to allow MacOS X to run on it.  ARDI does not currently have such a synthetic   
CPU, but does have tools, techniques and experience associated with its         
current synthetic CPU.                                                          

ARDI's mission is to be a leader in emulation, both CPU and OS,       
software.  ARDI's initial products emulate the Macintosh Classic OS and the     
Motorola 680x0 CPU.  ARDI's knowledge of emulation and the methodology to       
create emulation software will be used to refine and market ARDI's existing     
Macintosh compatibility products and can be used to provide emulation           
capabability to new hardware so that the new hardware can be backwardly         
compatible with existing hardware.                                              

Development to Date                                                             

ARDI has created two Macintosh compatibility product lines.  These    
product lines are Carbonless Copies and Executor.  Carbonless Copies is used    
by Macintosh programmers to create new versions of their applications for non-  
Macintoshes. Executor is used by PC owners to run Macintosh software on their   
PCs.  Executor is currently sold for both Windows and Linux.  Carbonless        
Copies is currently sold only for Windows but is presently being tested under   
Linux.                                                                          

Sales and Marketing to Date                                                     

 ARDI has never had sales or marketing employees or contractors.  It has
advertised occasionally in computer publications but primarily has sold its     
software from its website.  ARDI has supported itself by using its own          
engineers, primarily Clifford Matthews, to sell its software. This has          
consumed available engineering hours, which resulted in fewer sales than if     
ARDI had used professional sales and market people.                             

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Products and Services                                                           

General Technical Background                                                    

The original Macintosh released by Apple in 1984 was built out of     
hardware that could be purchased by other computer manufacturers and used to    
create Macintosh compatible computer systems.  The CPU was the mc68000 from     
Motorola.  The video image was produced using a fixed portion of the memory     
to represent the 512x342 black and white screen.  The hardware was basic, but   
the operating system was complex.  For a company to build a computer that       
could run Macintosh programs, the routines made available to programmers from   
the Classic Macintosh Operating System would have to be rewritten, just like    
cloning IBM PCs required the routines provided by the BIOS.                     

The Classic Macintosh System Software consists of three different     
portions of software: the Macintosh Operating System, the Macintosh Toolbox     
and Additional System Software.  ARDI has re-implemented the parts of the       
Classic Macintosh Operating System ARDI considers important, most of the        
Macintosh Toolbox and enough of the Additional System Software to enable        
Macintosh programs to run on PCs without the use of any software from Apple.    
ARDI has registered the trademark ROMlib to refer to this re-implementation.    

The Macintosh System Software is to a Macintosh what the PC BIOS and  
Windows are to a PC.  The Macintosh System Software routines are more           
numerous and more complex than the BIOS in PCs.  Several companies (e.g.        
Compaq, Phoenix) have duplicated the functionality of PC BIOS.  ARDI has        
duplicated the heart of the Macintosh System Software.  It is the               
availability of re-implemented PC BIOS and Microsoft's licensing of Windows     
that allows PC programs to run on PCs that were not made by IBM.  ARDI's        
technology allows Macintosh programs to run on PCs not made by Apple.           

Executor and Carbonless Copies                                        

 Executor is ARDI's program that creates a virtual Macintosh and thereby
allows Macintosh programs to be run on any platform supported by Executor.      
Executor is sold as two different products.  Executor for Windows includes      
both Executor/DOS and Executor/Win32.  Executor for Linux includes versions     
of Executor for all popular Linux distributions.  Executor's target audience    
is anyone who has a need or desire to run Macintosh programs on their PCs.      

 Carbonless Copies allows Macintosh developers to support and sell their
Macintosh applications on non-Macintosh systems.  When a Macintosh program is   
combined with Carbonless Copies, a new program that can be shipped to Windows   
and Linux users is created.                                                     

Incompatibilities                                                               

ARDI's core technology is adequate to run hundreds of Macintosh       
programs, but Macintosh programs that have been developed more recently are     
less likely to run than Macintosh programs that were developed years ago.       
ARDI will use a portion of the proceeds of this offering to use dirty-          
room/clean-room reverse-engineering in an attempt to limit the major sources    
of incompatibility.  ARDI will also try to use a portion of the proceeds to     
write a synthetic PowerPC CPU sufficiently compatible to run arbitrary          
Operating Systems directly on it, including MacOS X.                            

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Industry Analysis                                                               

Apple                                                                           

According to their 10-K filed on December 21, 2001, Apple's net sales 
were $5.3b (five point three billion dollars) for their fiscal year ending      
September 29, 2001.  During that twelve-month period they sold 3m (three        
million) CPU units.                                                             

Macintosh purchasers are the targeted consumers for ARDI's Executor   
product.  ARDI's products may be purchased as part of a move onto the           
Macintosh platform or as an adjunct to or to move off the Macintosh platform.   
As Macintoshes age, Macintosh owners who want to buy a new machine and          
continue to use their existing software can either purchase a new machine       
from Apple or purchase a non-Apple machine and use ARDI's emulation             
technology to run their old Macintosh programs.                                 

Macintosh Software                                                              

  Apple's website lists over 17,000 Macintosh applications.  Many of these
are available for Windows.  Relatively few of these Macintosh applications      
are available for Linux.  Even when an application is available for two or      
more platforms, there may be an additional charge when a Macintosh user wants   
to get the Windows or Linux version of the software.                            

Target Market                                                                   

Executor                                                                        

  Executor will be marketed for purchase primarily by people who desire to
use Macintosh applications on PCs running Windows or Linux.                     

Macintosh users may be potential Executor customers because they may  
want to use their existing Macintosh software on non-Macintoshes. Macintoshes   
are significantly outnumbered by non-Macintoshes.  For example, people who      
use a Macintosh at work or school may have a PC at home or vice-versa.          
Another use of Executor is to continue to use the same Macintosh applications   
even when the user doesn't have access to a Macintosh.                          

  When it is time to replace a machine, owners of Macintoshes may consider
buying a PC as a replacement and may want to continue using their Macintosh     
software.  When acquiring a second machine for a household, Macintosh users     
may consider using a PC as their second machine, for example in a family        
household where other household members use PCs outside the household.  Such    
a household might want to run their Macintosh applications on their PC using    
ARDI's technology.                                                              

Some people who use the Linux operating system who aren't Macintosh   
users may buy Executor to get access to high quality shrink-wrapped             
applications that will run efficiently on their machines.  Potential examples   
of such quality shrink-wrapped applications are Quark XPress, Adobe Photoshop   
or Quicken.  Even if these particular examples are ported to Linux, there are   
still 17,000 other Macintosh applications.                                      

 Network administrators, graphic arts shops and educational institutions
may purchase Executor for environments where Macintosh, Linux and Microsoft     
machines are used.                                                              

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Carbonless Copies                                                               

Carbonless Copies is licensed to developers for either $2,500 for a   
license which allows up to 100 copies of the new program to be sold, or         
$5,000 for a license which allows up to 1,000 copies of the new program to be   
sold.  ARDI negotiates royalties individually with developers who want to       
sell more than 1,000 copies of their products.                                  

Carbonless Copies is sold "AS IS" and includes no free technical      
support.  Developers are paying to bundle ARDI's existing technology with       
their products.  Carbonless Copies clients who require additions to ARDI's      
core technology pay for the additions.                                          

Product Licensing                                                               

Executor -- Executor has a typical end-user license that allows the licensee    
to use one copy of Executor on their machine in exchange for a fee.             
Additionally, if requested by a licensee, we will grant one license for         
several copies of Executor.                                                     

Carbonless Copies -- is a software library license, which allows the software   
manufacturer to include a copy of the Carbonless Copies Runtime System in       
their product.  The number of copies of their product that can be sold is       
limited by the license. Typical numbers are 100 to 1,000 copies.                

Neither licenses have time limits associated with them, but since the           
Carbonless Copies license limits the number of copies of the library that can   
be used, Carbonless Copies licensees need to purchase more licenses if they     
want to continue selling copies of their software after their initial set of    
licenses have been used.                                                        

At this point in time ARDI does not have any material single licensees for      
Executor or Carbonless Copies.                                                  

Competition                                                                     

Introduction                                                                    

ARDI is currently unaware of any other product that allows PCs to run 
hundreds of Macintosh applications without using Apple's software.  There are   
a variety of Macintosh emulators that work by having the user supply Apple's    
Macintosh operating system software. ARDI has written enough of the Classic     
Macintosh Operating System routines to allow PCs to run hundreds of Macintosh   
applications.                                                                   

In the future, ARDI's biggest direct competitor could be Apple, or a  
competitor who is currently unknown to ARDI with similar software that allows   
Macintosh applications to run on PCs without using Apple's intellectual         
property                                                                        

Current indirect competition includes actual Macintoshes running      
Macintosh applications; Macintosh emulators that require Apple-Intellectual     
Property; cross-platform software (such as software that is written for both    
Macintosh and PCs) and non-Macintosh software.                                  

Apple                                                                           

Apple does not currently market any products that allow Macintosh     
programs to run on non-Macintoshes.  Because Apple has significant resources,   
including the source to their own operating system, they could easily begin     

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to develop a product that will compete with ARDI if they chose to.  Apple       
licensed their Classic Macintosh Operating System to hardware vendors from      
September 1994 through September 1997.  They could choose to do so again in     
the future.  As such, although Apple isn't currently a direct competitor in     
the Macintosh emulation market, Apple could become or enable others to become   
competitors in the Macintosh emulation market at any time without any advance   
notice.                                                                         

Non-Macintosh Applications                                                      

Beyond the threat of Apple, people choosing to stop using Macintosh   
applications is the next threat.                                                

Although the Macintosh is the second largest shrink-wrapped software  
market, the PC shrink-wrapped market dominates the Macintosh shrink-wrapped     
software market.  Few applications are Macintosh only. As such, people who      
own Macintosh software who are going to be using a non-Macintosh will have a    
choice.  They can use their existing software under Executor or they can find   
a substitute in the PC domain, especially if the PC is running Windows          
instead of Linux.                                                               

Trademarks                                                                      

ARDI has registered the following three trademarks, which expire in 2009:       

*    ROMlib                                                                     
*    Executor                                                                   
*    the ARDI logo (letters ARDI in an Abacus frame)                            

Proprietary Rights                                                              

  Our success and ability to compete are dependent to a significant degree
on our ability to develop and maintain the proprietary aspects of our           
technology and operate without infringing on the proprietary rights of          
others. We seek to protect our source code for our software, documentation      
and other written materials under trade secret and copyright laws. We license   
our software to end-users and to other software developers, using standard      
industry licenses and practices as appropriate for each class of licensees.     
Finally, we seek to limit disclosure of our intellectual property by            
requiring employees and consultants with access to our proprietary              
information to execute confidentiality agreements with us and by restricting    
access to our source code.                                                      

Despite our efforts to protect our proprietary rights, unauthorized   
parties may attempt to copy aspects of our products or to obtain and use        
information that we regard as proprietary. Policing unauthorized use of our     
products is difficult and while we are unable to determine the extent to        
which piracy of our software exists, software piracy can be expected to be a    
persistent problem. In addition, the laws of many countries do not protect      
our proprietary rights to as great an extent as do the laws of the United       
States. Litigation may be necessary in the future to enforce our intellectual   
property rights, to protect our trade secrets, to determine the validity and    
scope of the proprietary rights of others or to defend against claims of        
infringement or invalidity. Any such resulting litigation could result in       
substantial costs and diversion of resources. We cannot be certain that our     
means of protecting our proprietary rights will be adequate or that our         
competitors will not independently develop similar technology.                  

Third parties may claim infringement with respect to our current or   
future products. We expect that developers of similar Macintosh compatibility   

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software products will increasingly be subject to infringement claims as the    
number of products and competitors in our industry segment grows and as the     
functionality of products in different segments of the software industry        
increasingly overlaps. Any such claims, with or without merit, could be time    
consuming to defend, result in costly litigation, divert management's           
attention and resources, cause product shipment delays or require us to enter   
into terms acceptable to us or at all. A successful infringement claim          
against us and our failure or inability to license the infringed rights or      
develop or license technology with comparable functionality may have a          
substantial negative effect on our ability to continue our business             
operations.                                                                     

Marketing and Sales Strategy                                                    

Executor is meant for end-users.  Compared to Executor 2, Executor 3  
will require additional documentation, packaging, placement and ads to          
attract the general public.  ARDI will attempt to sell Executor 3 through one   
or more distributors who can put shrink-wrapped copies of Executor on store     
shelves across the world.                                                       

  Carbonless Copies is essentially a licensing program for ARDI's existing
technology.  Macintosh developers may license Carbonless Copies so that they    
can ship their applications on non-Macintosh platforms.  Because Carbonless     
Copies is used exclusively by developers, significantly less packaging,         
placement and advertising is needed to sell Carbonless Copies.  Carbonless      
Copies documentation will be derived from ARDI's internal documentation (i.e.   
written by programmers for programmers).                                        

Employees                                                                       

ARDI currently has two full-time employees, Clifford Matthews and     
Deirdre Smith.  Smith handles all administrative functions including taking     
phone calls, first tier tech. support and order fulfillment.  Matthews          
handles everything else including product development, documentation and        
debugging.  Previous programmers for ARDI include Mathew Hostetter, now one     
of the founders of Curl; Sam Lantinga creator of the Simple Direct Media        
Library and former lead programmer of Loki Entertainment software and Cotton    
Seed.  The successful closing of this offering will allow ARDI to hire a CEO,   
CFO, sales staff and additional software developers.  Once a suitable CEO has   
been hired, Matthews will become CTO.                                           

  None of ARDI's employees is represented by a labor union or subject to a
collective bargaining agreement.                                                

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

The following discussion should be read in conjunction with the       
financial statements section included elsewhere in this prospectus.             

Overview                                                                        

 Historically, ARDI has developed software and proprietary products that
have solved technical problems, but due to lack of capital and marketing        
talent ARDI has been unable to effectively sell its products. ARDI currently    
sells two products (Executor and Carbonless Copies) solely through its          
website. Aside from the website ARDI is not marketing either product.  With     
investment, ARDI intends to hire a marketing director and enter into            
distribution agreements with third parties with national domestic               
distribution networks, such as Ingram Micro. ARDI has continually tailored      
its operational budget to closely correlate to funds received from operations   
and investment. It is conceivable that ARDI could remain in business            
indefinitely by continuing to operate in this manner. However, if ARDI is to    
expand its business and accomplish its business goals as outlined in this       
offering, substantial additional funds would be needed. Those funds are being   
raised through this offering.                                                   

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To implement ARDI's business plan with its strategic direction - that 
is, the marketing and distribution of Executor and Carbonless Copies and the    
development and introduction of new products - ARDI will require the            
substantial additional capital that this offering, if successful, provides.     
Additionally, partnerships are highly desirable for accelerating market         
penetration and for establishing market dominance.  Creators of new computer    
architectures and new operating systems are likely to benefit from ARDI's       
expertise in reverse engineering and emulation and as ARDI makes a name for     
itself with its existing Macintosh OS emulation and CPU emulation, ARDI will    
seek out partnerships with companies that have new technology.                  

Due to a lack of capital and a subsequent over reliance on Clifford   
Matthews, ARDI's majority stockholder and president, to research, develop,      
sell, plan and manage, ARDI has been unable to pursue a meaningful number of    
Carbonless Copies clients. A substantial part of ARDI's business over the       
last two years has come from Teacher Technology Systems, accounting for         
approximately 71% of ARDI's revenues in 2001 and approximately 36% in 2000.     
Teacher Technologies Systems was acquired by a private technology company and   
has since been disbanded.                                                       

  Revenues generated by ARDI in recent years via sales of Executor 2.1 and
Carbonless Copies have been enough to fund the solution to the major            
compatibility problems, but have not been sufficient to fund a separate clean-  
room/dirty-room team, to employ engineers necessary to implement these          
solutions, or to market an increased compatibility product.  As such,           
although ARDI's recent revenues display an ability to develop on an extremely   
limited budget, they do not reflect or predict ARDI's post-investment revenue   
potential.                                                                      

MATERIAL CHANGES IN RESULTS OF OPERATIONS                                       

Royalty Buyout Agreement                                                        

On October 11, 2000 ARDI entered into an agreement with Teacher       
Technology Systems, a long-term licensee of Carbonless Copies, whereby          
Teacher Technology Systems paid a one-time lump sum payment of $70,000 as a     
buyout of all royalties that it would have to pay under its existing license    
agreement. The royalty buyout expired on December 31, 2001. Teacher             
Technology Systems has since discontinued its operations.                       

COMPARISON OF SIX MONTHS ENDED MARCH 31, 2002 AND MARCH 31, 2001                

Revenue.  For the six months ended March 31, 2002, we had revenues of 
$28,875, compared to $70,305 for the six months ended March 31, 2001. The       
decrease in revenue is primarily attributable to decreased product marketing.   

Net Loss.  For the six months ended March 31, 2002, we incurred a net 
loss of approximately $28,139, compared with a net loss of $1,302,448 for the   
six months ended March 31, 2001. The decrease is primarily attributable to      
our decrease in sales revenue and to a deemed interest expense associated       
with the beneficial conversion of notes payable. Please see footnote 7 of our   
financial statements for further information.                                   

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COMPARISON OF YEARS ENDED SEPTEMBER 30, 2001 AND SEPTEMBER 30, 2000             

Revenue.  For the year ended September 30, 2001, we had revenues of   
$120,506, compared to $68,577 for the previous year. The increase in revenue    
is primarily attributable to the royalty buyout agreement with Teacher          
Technology Systems.                                                             

  Net Loss.  For the year ended September 30, 2001, we incurred a net loss
of approximately $1,287,041, compared with a net loss of $67,443 for the year   
ended September 30, 2000. The increase is attributable to a deemed interest     
expense associated with the beneficial conversion of notes payable. Please      
see footnote 7 of our financial statements for further information.             

Expenses.  For the year ended September 30, 2001, we had expenses,    
excluding depreciation, of approximately $122,717, which exceeded our total     
revenue by $2,211, compared to $115,459 for the year ended September 30,        
2000, which exceeded our total revenue by $46,882. The increase in general      
and administrative expenses has been primarily a result of our efforts to       
file this registration statement and preparing for becoming a public company.   

COMPARISON OF YEARS ENDED SEPTEMBER 30, 2000 AND SEPTEMBER 30, 1999             

Revenue.  For the year ended September 30, 2000, we had revenues of   
$68,577, compared to $109,400 for the previous year. The decrease in revenue    
was a result of the decreased sales of our Executor product, primarily due to   
its limitation of only emulating the 680x0 processors which Apple had already   
discontinued using.                                                             

Expenses. Our expenses, excluding depreciation, were  $115,459 for the
year ended September 30, 2000, compared with  $78,187 for the previous year,    
an increase of $37,272. The increase in general and administrative expenses     
is primarily attributable to increasing first level technical support from      
part-time to full-time.                                                         

  Net Loss.  For the year ended September 30, 2000, we incurred a net loss
of approximately $67,443, compared with a net income of $10,930 for the year    
ended September 30, 1999, a decrease of approximately $78,373. The decrease     
is primarily attributable to our decreased revenue and increased expenses.      

MATERIAL CHANGES IN FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES        

Since our inception, we have suffered from restricted cash flow. We   
continue to experience an ongoing working capital deficiency and, since         
September 30, 2001, cash has come from private sales of our common stock,       
limited license revenues and a royalty buyout agreement.  Although management   
believes ARDI could continue making small improvements with no other revenue    
than from licensing and sales of Executor and Carbonless Copies, we will        
continue to require substantial amounts of capital to meet the demands of our   
business plan. We are attempting to raise sufficient capital to meet our        
current obligations and to implement our new business plan.  Without ongoing    
revenues and/or the funding that we are seeking, it is unlikely that we will    
be able to fully implement our business plan and manage our day-to-day          
operations.                                                                     

Our balance of cash was $3,264 at September 30, 2001, compared with $0
at September 30, 2000. With such a restrictive cash position we have an         

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immediate need for additional capital.                                          

  Accounts payable decreased to $18,514 at September 30, 2001 from $76,423
at September 30, 2000.  The decrease of approximately $57,909 is primarily      
attributable to the conversion of certain accounts to common stock.             

  Long-term notes payable decreased to $171,786 at September 30, 2001 from
$235,807 at September 30, 2000 as a result of conversion of certain debts to    
common stock.                                                                   

  Our auditor's report indicates that there is substantial doubt about our
ability to continue as a going concern.  We cannot assure you that we will be   
able to generate internally or raise sufficient funds to continue our           
operations, or that our auditors will not issue another going concern           
opinion. However, since the minimum amount of funds to be raised through this   
offering are three million dollars ($3,000,000), if successful, we will have    
approximately twenty times the working capital we have had in our existence.    
If we fail to raise sufficient additional funds, either through additional      
financing or continuing operations, we will not be able to execute our          
current business plan and will have to change our revenue stream to be          
dependent on sales of consulting services rather than directly selling our      
products and technology.                                                        

 Our consolidated financial statements do not include any adjustments to
reflect the possible future effects on the recoverability and classification    
of assets or the amounts and classification of liabilities that may result      
from our possible inability to continue our operations.                         

We will use any internally generated funds and additional capital from
this offering and/or future private placements of equity to meet our            
obligations and to implement our new strategic direction.                       

We do not intend to make material capital expenditures in the short   
term. However, as discussed above, we will require cash to implement our        
strategic direction.                                                            

 We have an immediate need for additional capital to fund our operations
and to remedy our working capital deficit.  We are seeking to raise             
additional capital primarily through this offering.  We cannot assure you       
that we will be able to raise additional funds on acceptable terms, or at       
all. If we are unable to raise additional capital on a timely basis, our        
business will be adversely affected and we may not be able to continue as a     
going concern.                                                                  

Impact of Inflation                                                             

  Increases in the inflation rate are not expected to affect our operating
expenses.  Although we have no current plans to borrow additional funds, if     
we were to do so at variable interest rates, any increase in interest rates     
would increase our borrowed funds.                                              

Seasonality                                                                     

Our operations are not affected by seasonal fluctuations, although our
cash flows may at times be affected by fluctuations in the timing for large     
contracts, license fees and royalty payments.                                   

FACILITIES    

  We lease office space located at 2601 Wyoming, NE Suite 209 Albuquerque,
NM 87112.  The lease is for one year at approximately $575 per month.  We       
believe that our facilities are adequate for our purposes at this time.         

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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS    

Officer/Stockholder Loans                                                       

From time to time we may grant loans to our principal officer and     
stockholder, Clifford Matthews.  All loans made to Mr. Matthews bear interest   
at a rate of 7% per annum and are due upon demand with no specific date or      
terms of repayment. As of March 31, 2002 the outstanding loan balance payable   
to us from Mr. Matthews was $45,186.  We have never forgiven any indebtedness   
from Mr. Matthews.                                                              

MARKET PRICE OF COMMON STOCK    

At this time we have no intentions on listing our common stock on any 
quotation system or stock exchange. Prior to the effective date of this         
offering, our common stock was not traded on any public exchange or quotation   
system.                                                                         

As of March 31, 2002 there were 22 stockholders of our common stock.  

DIVIDENDS   

The payment of dividends is subject to the discretion of our board of 
directors and will depend, among other things, upon our earnings, our capital   
requirements, our financial condition, and other relevant factors. We have not  
paid or declared any dividends upon our common stock since our inception and,   
by reason of our present financial status and our contemplated financial        
requirements, do not anticipate paying any dividends upon our common stock in   
the foreseeable future.                                                         

We have never declared or paid any cash dividends. We currently do not
intend to pay cash dividends in the foreseeable future on the shares of         
common stock. We intend to reinvest any earnings in the development and         
expansion of our business. Any cash dividends in the future to common           
stockholders will be payable when, as and if declared by our board of           
directors, based upon the board's assessment of:                                

*    our financial condition;                                                   
*    earnings;                                                                  
*    need for funds;                                                            
*    capital requirements;                                                      
*    prior claims of preferred stock to the extent issued and  outstanding;     
and                                                                   
*    other factors, including any applicable laws.                              

Therefore, there can be no assurance that any dividends on the common 
stock will ever be paid.                                                        

EXECUTIVE COMPENSATION    

The following table sets forth the cash compensation of our Chief     
Executive Officer, Clifford T. Matthews for the past three fiscal years 2001,   
2000 and 1999. No other officer or director received remuneration in excess     
of $100,000 for fiscal 2001.  The remuneration described in the table does      
not include the cost to us of benefits furnished to the named executive         
officer, including premiums for health insurance and other benefits provided    
to individuals that are extended in connection with the conduct of our          
business. The value of these benefits cannot be precisely determined, but the   
executive officer named below did not receive other compensation in excess of   
the lesser of $50,000 or 10% of the officer's cash compensation.                

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                                                                [Download Table]
Summary Compensation Table                                                 
                                                Long Term  Compensation    
                  Annual Compensation                                      
Name and Principal                         Other Annual  Restricted        
     Position       Year  Salary   Bonus   Compensation    Stock    Options
                                                                           
Clifford Matthews,  2001  $15,000   N/A        N/A          N/A      50,000
   President, CEO   2000     -$0-   N/A        N/A          N/A       N/A  
   and Director     1999     -$0-   N/A        N/A          N/A       N/A  
Leonard Hall,                                                              
   Director         2001     -$0-   N/A        N/A          N/A      50,000
Michael Angst,                                                             
   Director         2001     -$0-   N/A        N/A          N/A      50,000

Mr. Matthews has received loans from us in the past which bear interest at 7%   
per annum and due upon demand. At September 30, 2001 Mr. Matthews'              
outstanding loan balance was $76,656.                                           

EXECUTIVE OFFICER/DIRECTOR OPTION GRANTS IN LAST FISCAL YEAR    

                                                                [Download Table]

                                  Percent of                              
                                    total                                 
                      Number of    options                                
                     securities   granted to    Exercise                  
                     underlying   employees     or base                   
                       options    in fiscal      price                    
       Name            granted       year      ($/Share)   Expiration Date
                                                                          
Clifford Matthews      50,000        29%         $1.25      March 23, 2006
Michael Angst          50,000        29%         $1.25      March 23, 2006
Leonard Hall           50,000        29%         $1.25      March 23, 2006
Irvin Metelits           -0-         -0-          -0-             --      

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND   
FISCAL YEAR-END OPTION VALUES   

                                                                [Download Table]

                                             Number of                     
                    Shares                  Securities                     
                   acquired                 underlying         Value of    
                      on        Value       unexercised      unexercised   
                   exercise    Realized     options at    options at fiscal
      Name            (#)        ($)      fiscal year-end      year-end    
                                                                           
Clifford Matthews     -0-        -0-          50,000             -0-       
Michael Angst         -0-        -0-          50,000             -0-       
Leonard Hall          -0-        -0-          50,000             -0-       
Irvin Metelits        -0-        -0-            -0-              -0-       

Compensation Committee Interlocks and Insider Participation                     

We do not currently have a compensation committee of the board of     
directors. However, the board of directors intends to establish a               
compensation committee, which is expected to consist of three inside            
directors and two independent members.                                          

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Stock Option Plan and Non-Employee Directors' Plan                              

 The following descriptions apply to stock option plans which we adopted
in March of 2001; 172,700 options have been granted as of the date of this      
prospectus.                                                                     

  We have reserved for issuance an aggregate of 2,500,000 shares of common
stock under our 2000/2001 Stock Option Plan and Non-Employee Directors' Plan.   
These plans are intended to encourage directors, officers, employees and        
consultants to acquire ownership of common stock.  The opportunity so           
provided is intended to foster in participants a strong incentive to put        
forth maximum effort for our continued success and growth, to aid in            
retaining individuals who put forth such efforts, and to assist in attracting   
the best available individuals to us in the future.                             

Stock Option Plan                                                               

  Officers (including officers who are members of the board of directors),
directors (other than members of the stock option committee to be established   
to administer the stock option plan and the directors' plan) and other          
employees and consultants and its subsidiaries (if established) will be         
eligible to receive options under the planned stock option plan.  The           
committee will administer the stock option plan and will determine those        
persons to whom options will be granted, the number of options to be granted,   
the provisions applicable to each grant and the time periods during which the   
options may be exercised.  No options may be granted more than ten years        
after the date of the adoption of the stock option plan.                        

Non-qualified stock options will be granted by the committee with an  
option price equal to the fair market value of the shares of common stock to    
which the non-qualified stock option relates on the date of grant.  The         
committee may, in its discretion, determine to price the non-qualified option   
at a different price.  In no event may the option price with respect to an      
incentive stock option granted under the stock option plan be less than the     
fair market value of such common stock to which the incentive stock option      
relates on the date the incentive stock option is granted.                      

 Each option granted under the stock option plan will be exercisable for
a term of not more than ten years after the date of grant.  Certain other       
restrictions will apply in connection with this plan when some awards may be    
exercised.  In the event of a change of control (as defined in the stock        
option plan), the date on which all options outstanding under the stock         
option plan may first be exercised will be accelerated.  Generally, all         
options terminate 90 days after a change of control.                            

Option Grants                                                                   

The board of directors adopted and the stockholders approved the      
adoption of our 2000/2001 stock option plan pursuant to which incentive stock   
options or nonstatutory stock options to purchase up to 2,500,000 shares of     
common stock may be granted to employees, directors and consultants. Pursuant   
to the plan we granted stock options as follows:                                

                                                                [Download Table]
   Date Granted          Exercise Price      Number of Shares 
                                                              
March 23, 2001                                                
           Granted           $1.25                     172,700
         Exercised             -                           -0-
         Cancelled             -                           -0-

Total outstanding            $1.25                     172,700

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Transfer Agent                                                                  

 The transfer agent for the common stock is Pacific Stock Transfer, 5844
S. Pecos Road, Suite D, Las Vegas, Nevada 89120.                                

SHARES ELIGIBLE FOR FUTURE SALE   

Prior to this offering, there has been no public market for our common
stock.  Future sales of substantial amounts of common stock in the public       
market could adversely affect market prices prevailing from time to time.       
Furthermore, since only a limited number of shares will be available for sale   
shortly after this offering because of restrictions on resale, sales of         
substantial amounts of our common stock in the public market after the          
restrictions lapse could adversely affect the prevailing market price and our   
ability to raise equity capital in the future.                                  

 Upon completion of this offering, we will have outstanding an aggregate
of 3,389,770shares of common stock, assuming:                                   

*    the maximum offering of 1,000,000 shares is achieved, and                  
*    no exercise of options to purchase 172,700 shares of common stock          
outstanding as of the date of this prospectus.                                  

Of these shares, the 1,000,000 shares of common stock sold in this    
offering will be freely tradable without restriction or further registration    
under the Securities Act, unless the shares are purchased by our "affiliates"   
as that term is defined in Rule 144 under the Securities Act.  The remaining    
2,389,770 shares of common stock held by our existing stockholders are          
"restricted securities" as that term is defined in Rule 144 under the           
Securities Act.  Restricted shares may be sold in the public market only if     
registered or if they qualify for an exemption from registration under Rule     
144 or 701 promulgated under the Securities Act.  As a result of the            
provisions of Rules 144 and 701, additional shares will be available for sale   
in the public market as follows:                                                

*    146,000 restricted shares will be eligible for immediate sale on the       
date of this prospectus;                                                    
*    111,200 restricted shares will be eligible for sale 90 days after the      
date of this prospectus; and                                                    
*    the remainder of the restricted shares will be eligible for sale from      
time to time thereafter upon expiration of their respective one-year holding    
periods, subject to restrictions on sales by affiliates and other vesting       
provisions.                                                                     

In general, under Rule 144 as currently in effect, beginning 90 days  
after the Effective Date, an affiliate of ARDI, or person (or persons whose     
shares are aggregated) who has beneficially owned restricted shares for at      
least one year will be entitled to sell in any 90 day period a number of        
shares that does not exceed the greater of:                                     

*    one percent (1%) of the then outstanding shares of our common stock; or    
*    the average weekly trading volume of our common stock on the NASDAQ        
during the four calendar weeks immediately preceding the date on which notice   
of the sale is filed with the SEC.                                              

Sales pursuant to Rule 144 are subject to requirements relating to    
manner of sale, notice, and the availability of current public information      

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about us.  A person (or persons whose shares are aggregated) who is not         
deemed to have been an affiliate of ARDI at any time during the 90 days         
immediately preceding the sale and who has beneficially owned restricted        
shares for at least two years is entitled to sell these shares under Rule       
144(k) without regard to the resale limitations.                                

 An employee, officer or director of or consultant to ARDI who purchased
or was awarded shares or options to purchase shares pursuant to a written       
compensatory plan or contract is entitled to rely on the resale provisions of   
Rule 701 under the Securities Act, which permits Affiliates and non-            
Affiliates to sell their Rule 701 shares without having to comply with Rule     
144's holding period restrictions, in each case commencing 90 days after the    
date of this prospectus. In addition, non-Affiliates may sell Rule 701 shares   
without complying with the public information, volume and notice provisions     
of Rule 144.                                                                    

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS   
ON ACCOUNTING AND FINANCIAL DISCLOSURE    

We have engaged the services of Weaver & Martin, LLP of Kansas City,  
Missouri to provide an audit of our financial statements for the years ended    
September 30, 2001 and September 30, 2000. This was our first auditor.  We      
have no disagreements with our auditor through the date of this prospectus.     

ARDI    

INDEX TO FINANCIAL STATEMENTS   

INDEPENDENT AUDITORS' REPORT                                             F-1    
BALANCE SHEET                                                            F-2    
STATEMENT OF OPERATIONS                                                  F-3    
STATEMENT OF CASH FLOWS                                                  F-4    
STATEMENT OF SHAREHOLDERS' DEFICIT                                       F-5    
NOTES TO FINANCIAL STATEMENTS                                         F-6-10    

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Report of Independent Accountants   

Stockholders and Directors                                                      
Abacus Research & Development, Inc.                                             

We  have  audited  the  accompanying  balance  sheet  of  Abacus  Research  &   
Development,  Inc.  as  of  September 30, 2001  and  2000,  and  the  related   
statements of operations, shareholders' deficit, and cash flows for the years   
ended  September  30,  2001  and  2000. These financial  statements  are  the   
responsibility  of  the management of the Company. Our responsibility  is  to   
express an opinion on these financial statements based on our audits.           

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

In our opinion, the financial statements referred to above present fairly, in   
all   material  respects,  the  financial  position  of  Abacus  Research   &   
Development,  Inc.  as  of  September 30, 2001  and  2000,  and  the  related   
statements  of operations, shareholders' equity (deficiency), and cash  flows   
for the years ended September 30, 2001 and 2000, in conformity with generally   
accepted accounting principles in the United States.                            

The  accompanying financial statements have been prepared assuming  that  the   
Company  will  continue as a going concern. As discussed in  Note  2  to  the   
financial  statements,  the  Company  has  suffered  recurring  losses   from   
operations  and  is  dependent upon the continued sale of its  securities  or   
obtaining  debt  financing  for funds to meet its  cash  requirements.  These   
factors raise substantial doubt about the Company's ability to continue as  a   
going  concern.  Management's plans with regard to  these  matters  are  also   
described  in Note 2. The financial statements do not include any adjustments   
that might result from the outcome of this uncertainty.                         

Weaver & Martin, LLC    

Kansas City, Missouri                                                           
December 26, 2001                                                               

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                                                                [Download Table]
                     Abacus Research & Development, Inc.                  
                                Balance Sheet                             

                                   March 31,           September 30,      
                                      2002           2001          2000   
Assets                            (unaudited)                             
                                                                          
Current assets:                                                           
  Cash                          $      1,695   $        3,264  $         0
  Prepaid expenses                    60,128           59,276            0
                                  ----------      -----------    ---------
                                      61,823           62,540            0
                                  ----------      -----------    ---------
Equipment                             44,247           44,247       40,029
Less: Accumulated depreciation        38,408           37,561       35,015
                                  ----------      -----------    ---------
                                       5,839            6,686        5,014
                                  ----------      -----------    ---------
Other assets:                                                             
  Other assets                           558              558          558
  Due from officer                    45,186           76,656       70,126
                                  ----------      -----------    ---------
                                      45,744           77,214       70,684
                                  ----------      -----------    ---------
                                $    113,406   $      146,440  $    75,698
                                  ==========      ===========    =========
                                                                [Download Table]
Liabilities and Shareholder's                                             
Deficit                                                                   
                                                                          
Current liabilities:                                                      
  Accounts payable              $     21,427   $       18,514  $    76,423
  Deferred revenue                         0           14,000            0
                                  ----------      -----------    ---------
                                      21,427           32,514       76,423
Other liabilities:                                                        
  Notes payable, long-term           177,978          171,786      235,807
                                  ----------      -----------    ---------
                                     199,405          204,300      312,230
                                  ----------      -----------    ---------
Contingencies and Commitments                                             
Shareholders' deficit:                                                    
  Common stock, $.001 par,                                                
6,000,000 shares authorized;                                              
2,393,770 shares issued and                                               
outstanding as of September 30,                                           
2001; 1,146,000 issued and                                                
outstanding as of September 30,                                           
2000;  2,393,770 issued and                                               
outstanding as of March 31,            2,394           2,394        1,146 
2002                                                                      
  Additional paid in capital       1,569,819        1,569,819      105,354
  Retained deficit               (1,658,212)      (1,630,073)    (343,032)
                                  ----------      -----------    ---------
                                    (85,999)         (57,860)    (236,532)
                                  ----------      -----------    ---------
                                $    113,406   $      146,440  $    75,698
                                  ==========      ===========    =========

See notes to financial statements.    

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                                                                [Download Table]
                     Abacus Research & Development, Inc.                    
                           Statement of Operations                          

                                                 Year Ended September 30,   
                           Six Months Ended                                 
                              March 31,                                     

                           2002        2001           2001         2000     
                              (unaudited)                                   
                                                                            
Revenue:                                                                    
  Sales revenue        $   28,875  $     42,305 $       64,506  $   68,577  
  Licensing revenue             0        28,000         56,000           0  
                          -------    ----------      ----------    -------- 
                           28,875        70,305         120,506      68,577 
Expense:                                                                    
  Depreciation                848         1,062           2,546       3,154 
  Consulting                    0             0          15,625      14,600 
  Insurance                14,351        10,041          20,507         365 
Rent                        5,863         7,200          14,400      14,400 
Payroll                    10,319        25,362          35,134      17,053 
General and                20,981        48,584          37,051      69,041 
administrative                                                              
expenses                                                                    
                          -------    ----------      ----------    -------- 
                           52,362        92,249         125,263     118,613 
                          -------    ----------      ----------    -------- 
Income (loss) from       (23,487)      (21,944)         (4,757)    (50,036) 
operations                                                                  

Other income (                                                              
expense ):                                                                  
  Interest income           2,130         3,105           6,167       4,975 
  Interest expense        (6,782)       (6,244)        (11,086)    (22,382) 
  Deemed interest                                                           
expense associated                                                          
with                                                                        
     beneficial                                                             
conversion of notes                                                         
payable                         0    (1,277,365)    (1,277,365)           0 
                          -------    ----------      ----------    -------- 
                          (4,652)    (1,280,504)     (1,282,284)    (17,407)
                          -------    ----------      ----------    -------- 
Net income (loss)      $ (28,139)  $ (1,302,448) $  (1,287,041)  $ (67,443) 
                          =======    ==========      ==========    ======== 
Basic and diluted                                                           
income (loss) per      $   (0.01)  $     (0.81) $       (0.71)  $   (0.06)  
share                                                                       
                          =======    ==========      ==========    ======== 
Weighted average                                                            
shares outstanding      2,393,770     1,604,990      1,802,185   1,146,000  
                          =======    ==========      ==========    ======== 

See notes to financial statements.    

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                                                                [Download Table]
                     Abacus Research & Development, Inc.                    
                     Statement Of Shareholders' Deficit                     

                 Common Stock      Contributed     Retained        Total    
               Shares     Amount     Capital       Deficit        Equity    
                                                                            
Balance,                                                                    
October 1,                                                                  
1998          1,146,000   $ 1,146  $    105,354  $  (286,518) $    (180,018)

Net income                                                                  
for the year         0         0             0        10,930         10,930 
              --------    ------    ----------    ----------    ----------- 
Balance,                                                                    
September                                                                   
30, 1999     1,146,000     1,146       105,354     (275,588)      (169,088) 

Net loss for                                                                
the year             0         0             0      (67,443)       (67,443) 
              --------    ------    ----------    ----------    ----------- 
Balance,                                                                    
September                                                                   
30, 2000     1,146,000     1,146       105,354     (343,032)      (236,532) 

Sales of                                                                    
common stock    22,000        22        27,478             0         27,500 

Common stock                                                                
issued for                                                                  
legal          111,200       111        44,889             0         45,000 
services                                                                    

Common stock                                                                
issued for                                                                  
consulting                                                                  
services        12,500        13        15,612             0         15,625 

Common stock                                                                
issued for                                                                  
notes                                                                       
payable                                                                     
  and                                                                       
beneficial                                                                  
conversion                                                                  
for debt     1,102,070     1,102     1,376,486             0      1,377,588 

Net loss for                                                                
the year             0         0             0   (1,287,041)    (1,287,041) 
              --------    ------    ----------    ----------    ----------- 
Balance                                                                     
September                                                                   
30, 2001     2,393,770     2,394     1,569,819   (1,630,073)       (57,860) 

The                                                                         
following                                                                   
information                                                                 
for the                                                                     
  six months                                                                
ended March                                                                 
31, 2002                                                                    
  is                                                                        
unaudited                                                                   

Net loss for                                                                
the six                                                                     
months                                                                      
  ended                                                                     
March 31,            0         0             0      (28,139)       (28,139) 
2002                                                                        
              --------    ------    ----------    ----------    ----------- 
Balance                                                                     
March 31,    2,393,770   $ 2,394  $  1,569,819  $(1,658,212) $     (85,999) 
              ========    ======    ==========    ==========    =========== 

See notes to financial statements.    

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                                                                [Download Table]
                     Abacus Research & Development, Inc.                   
                           Statement of Cash Flows                         

                             Six Months Ended        Year Ended September  
                                 March 31,                   30,           
                                2002         2001       2001         2000  
                                (unaudited)                                
                                                                           
Cash flows from                                                            
operating                                                                  
activities:                                                                
  Net income (loss)     $(28,139)   $ (1,302,448) $ (1,287,041)  $ (67,443)

Adjustments to                                                             
reconcile net                                                              
income (loss) to                                                           
cash                                                                       
  used by operating                                                        
activities:                                                                
     Depreciation                                                          
and amortization              848           1,062         2,546       3,154
     Stock issued                                                          
for services                    0          60,625        60,625           0
     Deemed                                                                
interest associated                                                        
with beneficial                                                            

conversion of notes             0       1,277,365     1,277,365           0
payable                                                                    
Changes in                                                                 
operating assets                                                           
and liabilities:                                                           
     Accounts                                                              
receivable                      0        (12,389)             0           0
     Prepaid                (852)        (43,888)      (59,276)           0
expense                                                                    
     Due from                                                              
shareholder                31,470        (31,568)       (6,530)         550
     Accounts                                                              
payable                     2,912        (49,379)      (32,249)           0
     Deferred                                                              
revenue                  (14,000)          42,000        14,000      45,924
                           ------      ----------   -----------    --------
          Cash used                                                        
in operating                                                               
activities                (7,761)        (58,620)      (30,560)    (17,815)
                           ------      ----------   -----------    --------
Cash flows from                                                            
investing                                                                  
activities:                                                                
     Acquisition of                                                        
property and                                                               
equipment                       0               0       (4,218)     (4,079)

          Cash used                                                        
in investing                                                               
activities                      0               0       (4,218)     (4,079)

Cash flows from                                                            
financing                                                                  
activities:                                                                
     Sale of common                                                        
stock                           0          27,500        27,500           0
     Increase in                                                           
notes payable               6,192          31,905        10,542      21,894
                           ------      ----------   -----------    --------
          Cash                                                             
provided by                                                                
financing                   6,192          59,405        38,042      21,894
activities                                                                 
                           ------      ----------   -----------    --------

Increase (decrease)                                                        
in cash                   (1,569)             785         3,264           0

Cash, beginning             3,264               0             0           0
                           ------      ----------   -----------    --------
Cash, ending            $   1,695   $         785 $       3,264  $        0
                           ======      ==========   ===========    ========

Supplement cash                                                            
flow information:                                                          
     Cash paid for                                                         
interest                $       0   $           0 $           0  $        0
                           ======      ==========   ===========    ========
     Cash paid for                                                         
income taxes                    0               0             0           0
                           ======      ==========   ===========    ========
Noncash financing                                                          
activities                                                                 
     Conversion of                                                         
notes payable to                                                           
common stock            $       0   $      92,333 $      92,333  $        0
                        =========   ============= =============  ==========
     Conversion of              0           8,000         8,000           0
accounts payable to                                                        
common stock                                                               
                           ======      ==========   ===========    ========

See notes to financial statements.    

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1.   The Company and Significant Accounting Policies                            

Nature of Operations                                                  

    Abacus  Research  &  Development,  Inc.  (ARDI)  was  incorporated  in
    Delaware  on  June 30, 1989. The Company was formed  to  research  and
    develop computer emulation and reverse-engineered software. ARDI  uses
    clean-room techniques to re-implement the 1,200 core Macintosh OS  and
    toolbox  routines.  This  allows ARDI to  sell  software  that  allows
    Macintosh  applications to run on machines that don't contain  Apple's
intellectual property.                                            

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 amounts reported  in  the  financial
    statements   and  notes.  Actual  results  could  differ  from   those
    estimates,  but  management  does not believe  such  differences  will
    materially  affect  the  Company's  financial  position,  results   of
operations, or cash flows.                                        

Cash Equivalents                                                      

    The  Company's  cash equivalents consist principally of any  financial
instrument with maturates of generally three months or less.      

Equipment                                                             

    Equipment  is  carried at cost. Depreciation is on the  straight  line
    and accelerated methods, based on the useful life of the asset. As  of
 March 31, 2002, all equipment is being depreciated over five years.

Maintenance and repairs are charged to operations as incurred.    

Basis of Accounting                                                   

    The  Financial  statements  are presented  on  the  accrual  basis  of
    accounting.  Under  this  method,  revenues  are  recognized  in   the
    accounting   period  in  which  they  are  earned  and  expenses   are
    recognized  in  the  accounting  period  in  which  the  liability  is
incurred.                                                         

Revenue Recognition                                                   

    Revenues  on sales of products are recognized when shipments are  made
    to  the  customer.   There  are no rights  of  return,  conditions  of
    acceptance,  or warranties, of any kind, nor are there any  subsequent
    services,  for  example,  installation  and  maintenance.   Consulting
    revenues  are  recognized  when the service  has  been  completed  and
revenues have been earned.  Expenses are recognized when incurred.

Income Taxes                                                          

    The  Company  accounts  for  its  income  taxes  using  Statement   of
    Financial  Accounting Standards (SFAS) No. 109, Accounting for  Income
    Taxes,  which  requires recognition of deferred  tax  liabilities  and
    assets  for expected future tax consequences of events that have  been
    included  in  the  financial statements of  tax  returns.  Under  this

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    method,  deferred tax liabilities and assets are determined  based  on
    the  differences  between the financial statements and  tax  basis  of
    assets and liabilities using enacted tax rates in effect for the  year
in which the differences are expected to reverse.                 

Research and Development                                              

    Research  and  development costs relating to both present  and  future
    products  are  expensed when incurred.  All research  and  development
    costs  were incurred by the majority shareholder/director and  is  not
    valued  as  there is no viable way of assessing the fair market  value
    of  his  time  spent.   The company will not  reimburse  him  for  his
personal efforts.                                                 

Estimated Fair Value of Financial Instruments                         

    The  information set forth below provides disclosure of the  estimated
    fair  value  of  the  Company's  financial  instruments  presented  in
    accordance  with the requirements of Statement of Financial Accounting
    Standards  (SFAS) No. 107. Fair value estimates discussed  herein  are
    based  upon  certain  market  assumptions  and  pertinent  information
    available  to management as of September 30, 2001. Since the  reported
    fair  values  of  financial instruments are based upon  a  variety  of
    factors,  they  may not represent actual values that could  have  been
    realized  as  of  September 30, 2001 or that will be realized  in  the
future.                                                           

    The  respective  carrying value of certain on-balance sheet  financial
    instruments   approximated   their  fair   values.   These   financial
    instruments  include cash, due from shareholder,  and  notes  payable.
    Fair  values  were  assumed to approximate carrying values  for  these
    financial  instruments since they are short-term in nature  and  their
    carrying  amounts approximated fair values or they are  receivable  or
payable on demand.                                                

Concentrations of Credit Risk                                         

    Financial   instruments  that  potentially  subject  the  Company   to
    concentrations of credit risk consist principally of cash. At  various
    times  during the year, the Company may have cash balances  in  excess
    of  federally  insured limits. The Company maintains its  cash,  which
    consists  primarily  of demand deposits, with high  quality  financial
institutions, which the Company believes, limits risk.            

Earnings Per Share                                                    

    The  Company computes loss per share in accordance with SFAS No.  128,
    Earnings Per Share. This standard requires dual presentation of  basic
    and  diluted  earnings per share on the face of the  income  statement
    for  all  entities  with  complex capital structures  and  requires  a
    reconciliation  of  the  numerator  and  denominator  of  the  diluted
earnings per share computation.                                   

    Net  loss  per common share (basic and diluted) is based  on  the  net
    loss   divided  by  the  weighted  average  number  of  common  shares
outstanding during the year.                                      

Stock Option Plan                                                     

    Officers  (including  officers  who  are  members  of  the  Board   of
    Directors),   directors(other  than  members  of  the   stock   option

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    committee  to be established to administer the stock option  plan  and
    the  director's  plan)  and other employees and  consultants  and  its
    subsidiaries  (if  established) will be eligible  to  receive  options
    under  the stock option plan.  The committee will administer the stock
    option  plan and will determine those persons to whom options will  be
    granted,   the  number  of  options  to  be  granted,  the  provisions
    applicable  to  each  grant  and the time  periods  during  which  the
    options  may  be exercised.  No options may be granted more  than  ten
years after the date of the adoption of the stock option plan.    

    Non-qualified stock options will be granted by the committee  with  an
    option  price equal to the fair market value of the shares  of  common
    stock  to which the non-qualified stock option related on the date  of
    grant.   The committee may, in its discretion, determine to price  the
    non-qualified  option  at a different price.   In  no  event  may  the
    option  price with respect to an incentive stock option granted  under
    the  stock  option  plan be less than the fair market  value  of  such
    common  stock to which the incentive stock option related on the  date
the incentive stock option is granted.                            

    Each  option  granted under the stock option plan will be  exercisable
    for  a  term  of not more than ten years after the date of the  grant.
    Certain  other  restrictions will apply in connection with  this  plan
    when  some  awards  may be exercised.  In the event  of  a  change  of
    control  (as defined in the stock option plan), the date on which  all
    options  outstanding  under  the  stock  option  plan  may  first   be
    exercised  will be accelerated.  Generally, all options  terminate  90
days after a change of control.                                   

Recent Accounting Pronouncements                                      

    In  June 2001, the Financial Accounting Standards Board (FASB)  issued
    Statement  of Financial Accounting Standards (SFAS) No. 141, "Business
    combination,"  and  SFAS  No.  142,  "Goodwill  and  Other  Intangible
    Assets."  These pronouncements provide guidance on how to account  for
    the   acquisition  of  businesses  and  intangible  assets,  including
    goodwill,  which  arise from such activities.  SFAS  No.  141  affirms
    that  only  one  method  of accounting may be applied  to  a  business
    combination,  the  purchase  method.   SFAS  No.  142  provides   that
    goodwill  resulting  from  business  combinations  as  well  as  other
    intangible  assets  no  longer be amortized  to  expense,  but  rather
    requires  an  annual  assessment  of  impairment  and,  if  necessary,
adjustments to the carrying value of goodwill.                    

    The  Company does not expect the adoption of SFAS No 141  and  142  to
    have  a  material  effect on its financial position  or  results  from
operations.                                                       

2.   Going Concern Matters                                                      

    The  accompanying financial statements have been prepared on  a  going
    concern  basis, which contemplates the realization of assets  and  the
    satisfaction  of  liabilities in the normal course  of  business.  The
    financial  statements do not include any adjustments relating  to  the
    recoverability  and  classification  of  liabilities  that  might   be
    necessary  should  the  Company  be unable  to  continue  as  a  going
concern.                                                          

    It  is management's plan to finance its operations for the foreseeable
    future   primarily   with   proceeds  from  capital   contributed   by
    shareholders and to explore other financing options in the  investment
    community. However, there can be no assurance that these sources  will

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    provide  sufficient cash inflows to enable the Company to achieve  its
operational objectives.                                           

3.   Notes Payable                                                              

    Notes  payable consists of notes with interest rates ranging  from  7%
    to  8%.   The notes are payable upon demand. Interest expense  related
    to  the  notes  was $11,100 and $22,400 for the years ended  September
    30,  2001  and  2000, and $6,800 for the six months  ended  March  31,
2002.                                                             

4.   Due From Officer                                                           

    The  Company  has a due from an officer/shareholder.  Interest  income
    has  been  accrued at a rate of 7% per annum and added to the  balance
    due.  Interest  income has been accrued in the amount  of  $6,200  and
    $5,000  for  the years ended September 30, 2001 and 2000,  and  $2,130
for the six months ended March 31, 2002.                          

5.   Income Taxes                                                               

    As  of  September 30, 2001, the Company had a net operating loss carry
    forward  for  Federal  income  tax  reporting  purposes  amounting  to
approximately $353,000 which expire in varying amounts to 2015.   

The components of the deferred tax asset was as follows:          

                                                                [Download Table]
                                       (unaudited)                         
                                        March 31,        September 30,     
                                          2002        2001         2000    
                                                                           
Benefit of net operating loss                                              
carryforwards                           $133,500    $123,000     $120,000  
Valuation allowance                     $133,500    $123,000     $120,000  
                                       ----------- ----------  ------------
Net deferred tax asset                     --          --           --     
                                       =========== ==========  ============

    Sufficient  uncertainty  exists regarding  the  realizability  of  the
    operating  loss carryforwards and, accordingly, a valuation  allowance
has been established.                                             

    A  reconciliation of the provision for income taxes to  the  statutory
federal rate for continuing operations is as follows:             

                                                                [Download Table]

                                               March 31,     September 30, 
                                                 2002        2001     2000 
                                              (unaudited)                  
                                                                           
Statutory Federal Income Tax Rate               -34.0%      -34.0%   -34.0%

Changes in valuation allowances                  34.0%       .3%     34.0% 

Nondeductible interest expense related to                                  
beneficial conversion.  See note 7.              0.0%       33.7%     0.0% 

                                              -----------  -------  -------
Effective Tax Rate                               0.0%        0.0%     0.0% 
                                              ===========  =======  =======

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6.   Commitments                                                                

    The  Company  leases  office space on a month  to  month  basis.  Rent
    expense was $14,400 for the period ended September 30, 2001 and  2000,
and $5,900 for the six months ended March 31, 2002.               

7.         Beneficial Conversion                                                

    In  January  of  2001,  the  Company  issued  1,036,020  shares  in  a
    beneficial  conversion of amounts owed at September 30, 2000  totaling
    $17,660.   Included in the $17,760 converted was $11,400  owed  to  an
    officer/shareholder of the Company.  The shares were valued  at  $1.25
    for  accounting purposes and the amount of value issued over the  debt
    retired  was included as interest expense.  Interest expense  relating
    to  the  beneficial conversion in the period ended September 30,  2001
was $1,277,365.                                                   

    In  January and February of 2001, the Company issued 66,050 shares  in
    a   conversion   of   $8,000   of  accounts   payable   owed   to   an
    officer/shareholder of the Company and $74,563 of notes  payable  owed
    to  unrelated parties.  The shares were valued at $1.25 for accounting
    purposes  and  the  amount  of value issued  was  equal  to  the  debt
    retired,  therefore there was no amount recorded as income or  expense
  in the financial statements for the period ended September 30, 2001.

8.   Shareholders' Equity                                                       

    On  July  7, 2000, there was a forward split of shares on a 1,000-to-1
    basis.  The financial statements have retroactive adjustments for  the
forward split.                                                    

    On  July 7, 2000 the Company amended its Articles of Incorporation  to
    increase  the authorized capitalization to 5,000,000 shares of  common
stock with a par value of $.001.                                  

    In  October  of 2000, the company sold 18,000 shares of  common  stock
for $22,500.                                                      

    In  October  of 2000, the company exchanged 111,200 shares  of  common
stock for $45,000 in legal services.                              

    In  January  of  2001, the company exchanged 12,500 shares  of  common
stock for $15,625 of consulting services.                         

    In  January  of  2001,  the company exchanged 1,036,020  shares  in  a
    beneficial conversion for $17,660 owed for past services.  See note  7
for details.                                                      

    In  February  of 2001, the company exchanged 66,050 shares  of  common
    stock  for  accounts payable of $8,000 and note payables  of  $74,563.
See note 7 for details.                                           

    In  March  of 2001, the company sold 4,000 shares of common stock  for
$5,000.                                                           

    On   September  12,  2001,  the  Company  amended  its   Articles   of
    Incorporation to increase the authorized capitalization  to  6,000,000
shares of common stock with a par value of $.001.                 

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9.   Stock Option Plan                                                          

    During  the year ended September 30, 2001, 172,700 stock options  were
    granted  with  a  strike price of $1.25.  As of  September  31,  2001,
    90,100  are  vested and no options have been exercised  or  cancelled.
    The  remaining  82,600  options vest at  various  dates  ranging  from
October, 2001 to May, 2002.                                       

    As  of March 31, 2002, 168,900 options are vested and no options  have
    been  exercised  or cancelled.  The remaining 3,800  options  vest  in
May, 2002.                                                        

The following table summarizes the Option Plan:                   

                                                                [Download Table]
                                             March 31,      September 30,  
                                               2002         2001      2000 
                                            (unaudited)                    
                                                                           
Beginning Balance - Option Outstanding        172,700         0        0   
     Options Granted                             0         172,700     0   
    Options Cancelled                            0            0        0   
    Options Exercised                            0            0        0   
                                           ------------   --------- -------

Ending Balance - Options Outstanding          172,700      172,700     0   
                                          =============  =========  =======
Exercise Price                                1.25          1.25       0   
Shares available for grant                  2,327,300    2,327,300     0   

    The  fair value of the options granted has been estimated at  a  value
    of  $0  at the date of the grant using a Black-Scholes option  pricing
model using the following assumptions:                            

Expected Life - 10 years                          
Volatility - 0%                                   
Dividend Yield - 0%                               
Weighted average risk free interest rate - 4.98%  

    FASB  Statement  No.  123  ("SFAS 123"), "Accounting  for  Stock-Based
    Compensation",  establishes a fair value based  method  of  accounting
    for   stock-based   compensation   plans   and   requires   additional
    disclosures for those companies who elect not to adopt the new  method
    of  accounting,  as permitted by SFAS 123.  The Company  accounts  for
    the  options  and warrants under Accounting Principles  Board  Opinion
    No.  25 under which no compensation cost has been recognized.  Had the
    compensation  cost  been  recognized  in  accordance  with   Financial
    Accounting Standards Board Statement No. 123 there would have been  no
effect on the Company's operating income.                         

10.  Licensing and Deferred Revenue                                             

    In  October  of  2000, the Company was paid $70,000  for  a  licensing
    buyout  agreement.  The agreement covered the period from  October  of
    2000  through December of 2001.  Licensing revenue of $56,000 has been
    recognized  from this agreement as of September 31, 2001 and  deferred
    revenue,  relating to the agreement, of $14,000 exists as of September
    30,  2001.   The  $14,000 of deferred revenue has been  recognized  as

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licensing revenue in the six months ended March 31, 2002.         

11.  Prepaid Expense                                                            

    As  of  September  31,  2001,  the  Company  had  $59,276  in  prepaid
    expenses.   The  prepaid expenses consists of $55,000 of  professional
    fees  associated with the future issuance of common stock  and  $4,276
    of  prepaid insurance.  The prepaid professional fees will  be  offset
    against the proceeds of the stock issuance.  The prepaid insurance  is
    for  a policy covering calendar year 2001 and has been expensed in the
six months ended March 31, 2002.                                  

12.  Unaudited Financial Statements                                             

    The  financial statements for the six months ended March 31, 2002  and
    2001  are  unaudited;  however, in the  opinion  of  management,  such
    statements  include  all  adjustments  (consisting  solely  of  normal
    recurring  adjustments)  necessary  to  a  fair  presentation  of  the
    financial  position, results of operations, and changes  in  financial
    position  of  the  Company.  The results of  operations  for  the  six
    months  ended  March  31,  2002 are not necessary  indicative  of  the
results to be obtained for the full fiscal year.                  

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No  dealer, salesman or any other  person                                       
has   been   authorized   to   give   any             $5,000,000                
information or to make any representation                                       
other   than  those  contained  in   this                ARDI                   
prospectus  and, if given or  made,  such                                       
information or representation must not be                                       
relied upon as having been authorized  by                                       
us.  This  prospectus does not constitute      ___________________, 2002        
an offer to sell or a solicitation of any                                       
offer to buy any security other than  the                                       
shares  of common stock offered  by  this                                       
prospectus,  nor  does it  constitute  an                                       
offer  to sell or a solicitation  of  any                                       
offer to buy the shares of a common stock                                       
by  anyone in any jurisdiction  in  which                                       
such   offer  or  solicitation   is   not                                       
authorized, or in which the person making                                       
such   offer  or  solicitation   is   not                                       
qualified  to do so, or to any person  to                                       
whom it is unlawful to make such offer or                                       
solicitation.  Neither  the  delivery  of                                       
this   prospectus  nor  any   sale   made                                       
hereunder  shall, under any circumstances                                       
create  any  implication that information                                       
contained  in this prospectus is  correct                                       
as  of any time subsequent to the date of                                       
this prospectus.                                                                

DEALER PROSPECTUS                                       
DELIVERY OBLIGATION                                       

Until    [ninety   days   from   offering                                       
effective  date], 2002, all dealers  that                                       
effect  transactions in these securities,                                       
whether  or  not  participating  in  this                                       
offering,  may be required to  deliver  a                                       
prospectus.  This is in addition  to  the                                       
dealers'   obligation   to   deliver    a                                       
prospectus  when  acting as  underwriters                                       
and   with   respect  to   their   unsold                                       
allotments or subscriptions.                                                    
                                       _____________________
                                       TABLE OF CONTENTS
                                                                  Page
                                     Prospectus Summary.           1
                       Summary Financial
                                     Information.                  3
                                     Risk Factors.                 4
                                     Use of Proceeds.             12
                                     Determination of Offering    13
            Price.
                                     Dilution.                    13
                                     Plan of Distribution.        14
                                     Litigation.                  15
                                     Management.                  15
                                     Principal Stockholders.      16
                                     Description of Securities.   17
                                     Legal Matters.               17
                                     Experts.                     17
                              Disclosure of Commission
                 Position on
                         Indemnification for
                    Securities Act
                                     Liabilities.                 17
                                     Our Business.                18
                                     Management Discussion and    26
               Analysis.
                                     Facilities.                  29
                               Certain Relationships and
                   Related Party
                                     Transactions.                29
                            Market Price of Common
                                     Stock.                       30
                                     Dividends.                   30
                                     Executive Compensation.      30
                                Shares Eligible for Future
                                     Sale.                        32
                    Changes in and
                        Disagreements with
                                     Accountants.                 34
                          Independent Auditors
                                      Report.                      F-1
                                      Balance Sheet.               F-2
                                      Statement of Operations.     F-3
                                      Statement of Cash Flows .    F-4
                                Statement of Stockholders'
                                      Equity .                     F-5
                        Notes to Financial
                                      Statements.                  F-6

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PART II:  INFORMATION NOT REQUIRED IN PROSPECTUS                                

1.   Section 145 of the Delaware General Corporation Laws ("DGCL") provides,    
in relevant part, as follows: "(a) A corporation shall have power to            
indemnify any person who was or is a party or is threatened to be made a        
party to any threatened, pending or completed action, suit or proceeding,       
whether civil, criminal, administrative or investigative  (other than an        
action by or in the right of the corporation) by reason of the fact that the    
person is or was a director, officer, employee or agent of the corporation,     
or is or was serving at the request of the corporation as a director,           
officer, employee or agent of another corporation, partnership, joint           
venture, trust or other enterprise,  against expenses (including attorneys'     
fees), judgments, fines and amounts  paid in  settlement  actually and          
reasonably  incurred by the person in  connection  with any action action,      
suit or  proceeding if the person acted in good faith and in a manner the       
person reasonably believed to be in or not opposed to the best interests of     
the corporation,  and, with respect to any criminal  action or proceeding,      
had no reasonable  cause to believe the person's conduct was unlawful.  The     
termination of any action, suit or proceeding by judgment, order, settlement,   
conviction, or upon a plea of nolo contendere or its equivalent, shall not,     
of itself, create a presumption that the person did not act in good faith and   
in a manner which the person reasonably believed to be in or not opposed to     
the best interests of the corporation, and, with respect to any criminal        
action or proceeding, had reasonable cause to believe that the person's         
conduct was unlawful.                                                           

  (b) A corporation shall have power to indemnify any person who was or is
a party or is threatened to be made a party to any threatened, pending or       
completed action or suit by or in the right of the corporation to procure a     
judgment in its favor by reason of the fact that the person is or was a         
director, officer, employee or agent of the corporation, or is or was serving   
at the request of the corporation as a director, officer, employee or agent     
of another corporation, partnership, joint venture, trust or other enterprise   
against expenses (including attorneys' fees) actually and reasonably incurred   
by the person in connection with the defense or settlement of such action or    
suit if the person acted in good faith and in a manner the person reasonably    
believed to be in or not opposed to the best interests of the  corporation      
and except that no indemnification shall be made in respect of any claim,       
issue or matter as to which such person shall have been adjudged to be liable   
to the corporation unless and only to the extent that the Court of Chancery     
or the court in which such action or suit was brought shall determine upon      
application that, despite the adjudication of liability but in view of all      
the circumstances of the case, such person is fairly and reasonably entitled    
to indemnity for such expenses which the Court of Chancery or such other        
court shall deem proper.                                                        

(c) To the extent that a present or former director or officer of a             
corporation has been successful on the merits or otherwise in defense of any    
action, suit or proceeding referred to in subsections  (a) and (b) of this      
section, or in defense of any claim, issue or matter therein, such person       
shall be indemnified against expenses (including attorneys' fees) actually      
and reasonably incurred by such person in connection therewith.                 

(d) Any indemnification under subsections (a) and (b) of this section (unless   
ordered by a court) shall be made by the corporation only as authorized in      
the specific case upon a determination that indemnification of the present or   
former director, officer, employee or agent is proper in the circumstances      
because the person has met the applicable standard of conduct set forth in      
subsections (a) and (b) of this section.  Such determination shall be made,     
with respect to a person who is a director or officer at the time of such       
determination, (1) by a majority vote of the directors who are not parties to   
such action, suit or proceeding, even though less than a quorum, or (2) by a    
committee of such directors designated by majority vote of such directors,      
even though less than a quorum, or (3) if there are no such directors, or if    
such directors so direct, by independent legal counsel in a written opinion,    
or (4) by the stockholders.                                                     

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(e) Expenses (including attorneys' fees) incurred by an officer or director     
in defending any civil, criminal, administrative or investigative action,       
suit or proceeding may be paid by the corporation in advance of the final       
disposition of such action, suit or proceeding upon receipt of an undertaking   
by or on behalf of such director or officer to repay such amount if it shall    
ultimately be determined that such person is not entitled to be indemnified     
by the corporation as authorized in this section.  Such expenses (including     
attorneys' fees) incurred by former directors and officers or other employees   
and agents may be so paid upon such terms and conditions, if any, as the        
corporation deems appropriate.                                                  

2.   ARDI has provided for indemnification of its directors or officers in      
its organizing documents.                                                       

3.   The Registrant may purchase and maintain insurance, at its expense, on     
behalf of any indemnitee against any liability asserted against him or her      
and incurred by him or her in such a capacity or arising out of his or her      
status as a representative of the Registrant, whether or not the Registrant     
would have the power to indemnify such person against such expense, liability   
or loss under the DGCL.                                                         

OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.                                    

The following table sets forth the costs and expenses to be paid in   
connection with the sale of the shares of common stock being registered         
hereby. All amounts are estimates except for the Securities and Exchange        
Commission registration fee and the NASD filing fee.                            

Securities and Exchange Commission registration       $1,250                    
fee                                                                             
NASD filing fee                                            0                    
Accounting fees and expenses                           5,000                    
Legal fees and expenses                               25,000                    
Printing fees and expenses                            15,000                    
Blue-sky fees and expenses                             2,750                    
Transfer agent and registrar fees and expenses           500                    
Miscellaneous                                            500                    
Total                                                $50,000                    

RECENT SALES OF UNREGISTERED SECURITIES                                         

 On October 3, 2000, we sold 10,000 shares of our $0.001 par value
common stock for cash consideration of $12,500 to two individuals known         
personally by Clifford Matthews. We believe that the issuance of the shares     
was exempt from the registration and prospectus delivery requirements of the    
Securities Act of 1933 by virtue of Section 4(2). The shares were issued        
directly by us and did not involve a public offering or general solicitation.   
The investors occupied a privileged position with our company, due to their     
preexisting relationship with Clifford Matthews which began in 1993, that       
afforded them an opportunity for effective access to files and records of our   
company that contained relevant information needed to make their investment     
decision, including our financial statements and material contracts. We         
reasonably believed that the investors, immediately prior to making the         
sales, had such knowledge and experience in our financial and business          
matters that they were capable of evaluating the merits and risks of            
their investment.  The investors had the opportunity to speak with our          
management on several occasions prior to their investment decision. There       
were no commissions paid on the sale of the shares.                             

 On October 15, 2000, we sold 8,000 shares of our $0.001 par value
common stock for cash consideration of $10,000 to an individual known           
personally by Clifford Matthews since 1998. We believe that the issuance        
of the shares was exempt from the registration and prospectus delivery          
requirements of the Securities Act of 1933 by virtue of Section 4(2). The       
shares were issued directly by us and did not involve a public offering or      
general solicitation. The investor occupied a privileged position with our      

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company, due to their preexisting relationship with Clifford Matthews,          
that afforded them an opportunity for effective access to files and             
records of our company that contained relevant information needed to make       
their investment decision, including our financial statements and material      
contracts. We reasonably believed that the investor, immediately prior to       
making the sales, had such knowledge and experience in our financial and        
business matters that they were capable of evaluating the merits and            
risks of their investment.  The investor had the opportunity to speak           
with our management on several occasions prior to their investment              
decision. There were no commissions paid on the sale of the shares.             

On October 1, 2000, we exchanged 111,200 shares of common stock 
for $45,000 in legal services. We believe the issuance to be exempt from        
registration under the Securities Act of 1933 pursuant to the exemption         
provided by Rule 701 for securities issued in compensatory circumstances.       
The recipient of the shares had complete access to our books and records        
and was afforded multiple opportunities to speak with our management with       
regards to their investment decision.                                           

    On January 16, 2001, we issued 12,500 shares of our $0.001 par value
common stock in exchange for past consulting services valued at $15,625 to      
an individual known personally by Clifford Matthews since at least 1994. We     
believe that the issuance of the shares was exempt from the registration and    
prospectus delivery requirements of the Securities Act of 1933 by virtue of     
Section 4(2). The shares were issued directly by us and did not involve a       
public offering or general solicitation. The recipient of the shares            
occupied a privileged position with our company, due to their preexisting       
relationship with Clifford Matthews, that afforded them an opportunity for      
effective access to files and records of our company that contained the         
relevant information needed to make their investment decision, including our    
financial statements and material contracts. We reasonably believed that the    
recipient, immediately prior to issuing the shares, had such knowledge and      
experience in our financial and business matters that they were capable of      
evaluating the merits and risks of their investment.  The recipient had the     
opportunity to speak with our management on several occasions prior to their    
investment decision. There were no commissions paid on the issuance of the      
shares.                                                                         

     On January 16, 2001, we issued 570,000 shares of our $0.001 par value
common stock to Clifford Matthews, our president, in consideration for past     
wages.  We believe that the issuance of the shares was exempt from the          
registration and prospectus delivery requirements of the Securities Act of      
1933 by virtue of Section 4(2). Mr. Matthews, because of his position with      
our company, was deemed to be an accredited investor, as such term is defined   
in rule 501(a) of Regulation D promulgated under the Securities Act of 1933.    
The shares were issued directly by us and did not involve a public offering     
or general solicitation. There were no commissions paid on the issuance of      
the shares.                                                                     

     On January 16, 2001, we issued 466,020 shares of our $0.001 par value
common stock to five individuals known by Clifford Matthews for past services.  
We believe that the issuance of the shares was exempt from the registration     
and prospectus delivery requirements of the Securities Act of 1933 by virtue    
of Section 4(2). The shares were issued directly by us and did not involve a    
public offering or general solicitation. The recipients of the shares           
occupied a privileged position with our company, due to their preexisting       
relationship with Clifford Matthews and their past employment with the          
company, that afforded them an opportunity for effective access to files        
and records of our company that contained the relevant information needed       
to make their investment decision, including our financial statements and       
material contracts. We reasonably believed that the recipients, immediately     
prior to issuing the shares, had such knowledge and experience in our           
financial and business matters that they were capable of evaluating the         
merits and risks of their investment.  The recipients had the opportunity to    
speak with our management on several occasions prior to their investment        
decision. There were no commissions paid on the issuance of the shares.         
This issuance, along with the issuance of 570,000 shares to Clifford            
Matthews, was deemed a beneficial conversion for $17,660 owed for past          
services.  See note 7 of the financial statements for additional details.       

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    On February 20, 2001, we exchanged 66,050 shares of common stock for
accounts payable of $8,000 and note payables of $74,563. We believe that the    
issuance of the shares was exempt from the registration and prospectus          
delivery requirements of the Securities Act of 1933 by virtue of Section 4(2).  
The shares were issued directly by us and did not involve a public offering     
or general solicitation. The recipients of the shares occupied a privileged     
position with our company, due to their preexisting relationship with           
Clifford Matthews and their positions as creditors of the company, that         
afforded them an opportunity for effective access to files and records          
of our company that contained the relevant information needed to make their     
investment decision, including our financial statements and material            
contracts. We reasonably believed that the recipients, immediately prior        
to issuing the shares, had such knowledge and experience in our financial       
and business matters that they were capable of evaluating the merits and        
risks of their investment.  The recipients had the opportunity to speak with    
our management on several occasions prior to their investment decision. There   
were no commissions paid on the issuance of the shares.                         

      On March 12, 2001, we sold 4,000 shares of our $0.001 par value common
stock for cash consideration of $5,000 to two individuals known personally      
by Clifford Matthews. We believe that the issuance of the shares was exempt     
from the registration and prospectus delivery requirements of the Securities    
Act of 1933 by virtue of Section 4(2). The shares were issued directly by us    
and did not involve a public offering or general solicitation. The investors    
occupied a privileged position with our company, due to their preexisting       
relationship with Clifford Matthews, that afforded them an opportunity for      
effective access to files and records of our company that contained relevant    
information needed to make their investment decision, including our financial   
statements and material contracts. We reasonably believed that the investors,   
immediately prior to making the sales, had such knowledge and experience in     
our financial and business matters that they were capable of evaluating the     
merits and risks of their investment.  The investors had the opportunity to     
speak with our management on several occasions prior to their investment        
decision. There were no commissions paid on the sale of the shares.             

All of the above-described issuances were exempt from registration (i)          
pursuant to Section 4(2) of the Securities Act as transactions not involving    
a public offering or (ii) Rule 701 promulgated under the Securities Act.        
With respect to each transaction listed above, no general solicitation was      
made by either the Registrant or any person acting on its behalf. All such      
securities issued pursuant to such exemptions are restricted securities as      
defined in Rule 144(a)(3) promulgated under the Securities Act, appropriate     
legends have been placed on the documents evidencing the securities, and may    
not be offered or sold absent registration or pursuant to an exemption          
therefrom.                                                                      

EXHIBITS                                                                        

  The  Exhibits  required  by Item 601 of Regulation  S-B,  and  an  index
thereto, are attached.                                                          

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UNDERTAKINGS                                                                    

A.   The undersigned registrant hereby undertakes to:                           

(1) File, during any period in which it offers or sells securities, a 
post-effective amendment to this registration statement to:                     

       (i)  Include  any  prospectus required by section 10(a)(3)  of  the
Securities Act;                                                       

(ii) Reflect in the prospectus any facts or events which,   
individually or together, represent a fundamental change in the       
information in the registration statement; and Notwithstanding the    
forgoing, any increase or decrease in volume of securities offered (if
  the total dollar value of securities offered would not exceed that which
was registered) and any deviation From the low or high end of the     
estimated maximum offering range may be reflected in the form of      
prospects filed with the Commission pursuant to Rule 424(b) if, in the
 aggregate, the changes in the volume and price represent no more than a
20% change in the maximum aggregate offering price set forth in the   
"Calculation of Registration Fee" table in the effective registration 
statement.                                                            

       (iii) Include any additional or changed material information on the
plan of distribution.                                                 

  (2) For determining liability under the Securities Act, treat each post-
effective amendment as a new registration statement of the securities           
offered, and the offering of the securities at that time to be the initial      
bona fide offering.                                                             

(3) File a post-effective amendment to remove from registration any of
the securities that remain unsold at the end of the offering.                   

B.                                                                              
(1)  Insofar as indemnification for liabilities arising under the     
Securities Act of 1933 (the "Act") may be permitted to directors, officers      
and controlling persons of the small business issuer pursuant to the            
foregoing provisions, or otherwise, the small business issuer has been          
advised that in the opinion of the Securities and Exchange Commission such      
indemnification is against public policy as expressed in the Act and is,        
therefore, unenforceable.                                                       

(2)  In the event that a claim for indemnification against such       
liabilities (other than the payment by the small business issuer of expenses    
incurred or paid by a director, officer or controlling person of the small      
business issuer in the successful defense of any action, suit or proceeding)    
is asserted by such director, officer or controlling person in connection       
with the securities being registered, the small business issuer will, unless    
in the opinion of its counsel the matter has been settled by controlling        
precedent, submit to a court of appropriate jurisdiction the question whether   
such indemnification by it is against public policy as expressed in the         
Securities Act and will be governed by the final adjudication of such issue.    

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SIGNATURES    

In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets    
all of the requirements for filing on Form SB-2 and authorized this             
registration statement to be signed on its behalf by the undersigned,           
thereunto duly authorize, in the City of Albuquerque, on June 19, 2002.         

ARDI                                                                            

By: /s/ Clifford T. Matthews                                                    
Clifford T. Matthews, President                                   

Special Power of Attorney                                                       

 The undersigned constitute and appoint Clifford Matthews their true and
lawful attorney-in-fact and agent with full power of substitution, for him      
and in his name, place, and stead, in any and all capacities, to sign any and   
all amendments, including post-effective amendments, to this Form SB-2          
Registration Statement, and to file the same with all exhibits thereto, and     
all documents in connection therewith, with the Securities and Exchange         
Commission, granting such attorney-in-fact the full power and authority to do   
and perform each and every act and thing requisite and necessary to be done     
in and about the premises, as fully and to all intents and purposes as he       
might or could do in person, hereby ratifying and confirming all that such      
attorney in-fact may lawfully do or cause to be done by virtue hereof.          

Pursuant to the requirements of the Securities Act of 1933, this      
registration statement has been signed by the following persons in the          
capacities and on the date indicated:                                           

Signature                     Title                         Date                

/s/ Clifford Matthews         President, Chief              9/18/2001           
Clifford Matthews             Executive Officer,                                
Director            

/s/ Irvin Metelits            Treasurer, Controller         9/18/2001           
Irvin Metelits                                                                  

/s/ Michael Angst             Director                      9/18/2001           
Michael Angst                                                                   

/s/ Leonard Hall              Director                      9/18/2001           
Leonard Hall                                                                    

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EXHIBIT INDEX                                                                   

3.1** Certificate of Incorporation of Abacus Research & Development, Inc.       
filed on June 30, 1989.                                     

3.1.1**   Amended Certificate of Incorporation of Abacus Research &             
Development, Inc. filed on July 7, 2000.                    

3.1.2**   Amended Certificate of Incorporation of Abacus Research &             
Development, Inc. filed on September 12, 2001.              

3.2**     Bylaws of Abacus Research & Development, Inc.                         

10-1**    Escrow Agreement with Sunwest Escrow, LC dated January 29, 2002.      

10-2**    Subscription Agreement                                                

5.1*        Opinion of Stoecklein Law Group                                     

23.1*     Consent of Weaver & Martin, LLC                                       

23.2*     Consent of Stoecklein Law Group                                       

99**  2001 Abacus Research & Development, Inc. Master Stock Option Plan         
_________________________                                                       
*    Filed herewith                                                             
**   Filed in Form SB-2/A on May 22, 2002                                       

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘SB-2/A’ Filing		Date		First		Last			Other Filings
		3/23/06		33
		1/1/03		3		16
Filed on:		6/20/02
		6/19/02		55
		5/22/02		56					SB-2/A
		3/31/02		15		48
		1/29/02		56
		12/31/01		29
		12/26/01		37
		12/21/01		25
		9/30/01		7		47
		9/29/01		25
		9/12/01		46		56
		3/31/01		29		48
		3/23/01		19		34
		3/12/01		53
		2/20/01		53
		1/16/01		52
		10/15/00		51
		10/11/00		29
		10/3/00		51
		10/1/00		52
		9/30/00		6		46
		7/7/00		46		56
		9/30/99		30
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