SEC Info - Biolargo, Inc. - ‘10KSB’ for 12/31/03

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Biolargo, Inc. – ‘10KSB’ for 12/31/03

On: Monday, 11/15/04, at 7:40pm ET · As of: 11/16/04 · For: 12/31/03 · Accession #: 1144204-4-19205 · File #: 0-19709

Previous ‘10KSB’: ‘10KSB’ on 5/23/03 for 12/31/02 · Next: ‘10KSB’ on 6/29/05 for 12/31/04 · Latest: ‘10KSB/A’ on 3/10/08 for 12/31/06 · 19 References:

  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

11/16/04  Biolargo, Inc.                    10KSB      12/31/03   17:456K                                   Vintage/FA

Annual Report — Small Business — Form 10-KSB
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10KSB       Annual Report -- Small Business                       96    436K 
 2: EX-3.9      Articles of Incorporation/Organization or By-Laws      8     31K 
 3: EX-4.6      Instrument Defining the Rights of Security Holders    10     46K 
 4: EX-4.7      Instrument Defining the Rights of Security Holders    11     46K 
 5: EX-4.9      Instrument Defining the Rights of Security Holders    12     56K 
 6: EX-10.19    Material Contract                                      1      7K 
 7: EX-10.23    Material Contract                                      3     17K 
 8: EX-10.25    Material Contract                                      4     20K 
 9: EX-10.26    Material Contract                                      4     20K 
10: EX-10.27    Material Contract                                     10     36K 
11: EX-10.29    Material Contract                                     17     62K 
12: EX-14.1     Code of Ethics                                         5     21K 
13: EX-21.1     Subsidiaries of the Registrant                         1      6K 
14: EX-23.1     Consent of Experts or Counsel                          1     10K 
15: EX-23.2     Consent of Experts or Counsel                          1      9K 
16: EX-31.1     Certification per Sarbanes-Oxley Act (Section 302)     2±    12K 
17: EX-32.1     Certification per Sarbanes-Oxley Act (Section 906)     1     10K

10KSB — Annual Report — Small Business
Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (Word, et al.) Certain Relationships and Related Transactions Changes in and Disagreements With Accountants on Accounting and Financial Disclosure Controls and Procedures Description of Business Description of Property Directors, Executive Officers and Compliance With Section 16(A) of the Exchange Act Discontinued Operations Executive Compensation Exhibits, Reports on Form 8-K, and Index to Financial Statements Financial Statements Legal Proceedings Management's Discussion and Analysis or Plan of Operations Market For Common Equity and Related Stockholder Matters Principal Accountant Fees and Services Risk Factors Security Ownership of Certain Beneficial Owners and Management Submission of Matters to A Vote of Security Holders
1	1st Page - Filing Submission
3	Item 1. Description of Business
11	Risk Factors
17	Item 2. Description of Property
18	Item 3. Legal Proceedings
19	Item 4. Submission of Matters to A Vote of Security Holders
20	Item 5. Market For Common Equity and Related Stockholder Matters
25	Item 6. Management's Discussion and Analysis or Plan of Operations
30	Discontinued Operations
40	Item 7. Financial Statements
"	Item 8. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
41	Item 8A. Controls and Procedures
42	Item 9. Directors, Executive Officers and Compliance With Section 16(A) of the Exchange Act
45	Item 10. Executive Compensation
49	Item 11. Security Ownership of Certain Beneficial Owners and Management
50	Item 12. Certain Relationships and Related Transactions
54	Item 13. Exhibits, Reports on Form 8-K, and Index to Financial Statements
59	Item 14. Principal Accountant Fees and Services

10KSB 1st Page of 96 TOC ↑Top Previous Next ↓Bottom Just 1st
 
 UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 FORM 10-KSB
(Mark One)

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2003                     

OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE TRANSITION PERIOD FROM _________TO __________       

COMMISSION FILE NUMBER: 33-43423

 NUWAY MEDICAL, INC.
(Name of Small Business Issuer in its Charter)

    Delaware                                  65-0159115
    --------                                  ----------
     (State or other jurisdiction of           (IRS Employer Identification No.)
incorporation or organization)                                        

2603 Main Street, Suite 1150, Irvine, CA 92614
--------------------------------------------------
(Address of principal executive offices, Zip Code)

Issuer's telephone number, including area code: (949) 235-8062

Securities registered under Section 12(b) of the Exchange Act:
None

Securities registered under Section 12(g) of the Exchange Act:
Common Stock, $0.00067 par value

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

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

 Issuer's revenue for its most recent fiscal year: $ -0-
                                                   -----

       The aggregate market value of the voting and non-voting common equity
held by non-affiliates computed by reference to the price at which the common   
equity was sold, or the average bid and asked price of such common equity, as of
December 31, 2003 was $0.04 and as of October 21, 2004 was $0.001.              

         The number of shares outstanding of the issuer's class of common equity
as of December 31, 2003 was 36,386,486 and as of October 21, 2004 was           
51,166,486.                                                                     

 Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]

10KSB 2nd Page of 96 TOC 1st Previous Next ↓Bottom Just 2nd
 TABLE OF CONTENTS

PART I                                                                          

Item 1.  Description of Business                                               3
Item 2.  Description of Property                                              17
Item 3.  Legal Proceedings                                                    18
Item 4.  Submission of Matters to a Vote of Security Holders                  19

PART II                                                                         

Item 5.  Market for Common Equity and Related Stockholders Matters            20
Item 6.  Management's Discussion and Analysis of Financial Condition and        
         Results of Operation                                                 25

Item 7.  Financial Statements                                                 40
Item 8.  Changes In and Disagreements with Accountants on Accounting and        
         Financial Disclosure                                                 40

Item 8A.  Controls and Procedures                                             41

PART III                                                                        

Item 9.  Directors, Executive Officers, Promoters and Control Persons;          
         Compliance with Section 16(a) of the Exchange Act                    42
Item 10. Executive Compensation                                               45
Item 11. Security Ownership of Certain Beneficial Owners and Management       49
Item 12. Certain Relationships and Related Transactions                       50
Item 13. Exhibits and Reports on Form 8-K                                     54
Item 14. Principal Accountant Fees and Services                               59

Signatures                                                                    61

Consolidated Financial Statements for the Years Ended                           
December 31, 2003 and 2002                                            F-1 - F-34

Exhibits Filed With This Report                                                 

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10KSB 3rd Page of 96 TOC 1st Previous Next ↓Bottom Just 3rd
PART I                                                                          

ITEM 1. DESCRIPTION OF BUSINESS                                                 

USE OF FORWARD LOOKING STATEMENTS IN THIS REPORT                                

This Annual Report on Form 10-KSB (the "Annual Report") contains forward-looking
statements. These forward-looking statements include predictions regarding our  
future:                                                                         

o     Business plans;                                               

o     Financing plans;                                              

o     general and administrative expenses;                          

o     liquidity and sufficiency of existing cash;                   

o     the outcome of pending or threatened litigation; and          

 o     the effect of recent accounting pronouncements on our financial
condition and results of operations.                    

        You can identify these and other forward-looking statements by the use
of words such as "may," "will," "expects," "anticipates," "believes,"           
"estimates," "continues," or the negative of such terms, or other comparable    
terminology. Forward-looking statements also include the assumptions underlying 
or relating to any of the foregoing statements.                                 

      Our actual results could differ materially from those anticipated in
these forward-looking statements as a result of various factors, including those
set forth below under the heading "Risk Factors." All forward-looking statements
included in this document are based on information available to us on the date  
hereof. We assume no obligation to update any forward-looking statements.       

       The information contained in this Annual Report is as of December 31,
2003, unless expressly stated otherwise.                                        

OVERVIEW                                                                        

    NuWay Medical, Inc., a Delaware corporation (the "Company") had no
continuing business operations as of December 31, 2003. At this time, the       
Company is operating as a public shell and management is seeking merger and     
acquisition candidates with ongoing operations.                                 

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      Over the course of several years, the Company has attempted to enter
various businesses through the acquisitions of entities operating ongoing       
businesses or technology that needed to be developed and marketed. However, as a
result of various factors, primarily inadequate capital and the inability to    
raise financing successfully, these acquisitions could not be properly exploited
and integrated to produce profitable operations by the Company. Management of   
the Company has elected to dispose, through sales or other means, these         
acquisitions.                                                                   

        The Company also continues to deal with the effects of certain matters
that arose (i) under prior management and (ii) from its business dealings with a
former consultant and principal stockholder of the Company, Mark Roy Anderson.  

        The Company is a party to two lawsuits, one brought by Flight Options,
Inc. ("Flight Options") as a result of an assignment of contract executed by the
Company's former President, Todd Sanders, and the other brought by the Company's
former chief financial officer, Geraldine Lyons. See "Legal Proceedings".       

       Mr. Anderson is a former affiliate of the Company and was involved in
the Company from June 2002 until March 2003 through a series of transactions    
between the Company and Mr. Anderson or companies affiliated with Mr. Anderson. 
See "Related Parties and Certain Transactions". Mr. Anderson became involved    
with the Company during a period of transition of management from the Company's 
prior management team led by Mr. Sanders and a shift in the Company's business  
focus from a variety of businesses in gaming, tobacco and oil and gas, to       
healthcare and health-related technology.                                       

        In June 2002, Mr. Anderson purchased 1,000,000 shares of the Company's
common stock for $250,000. In July 2002, Med Wireless, Inc. ("Med Wireless"), a 
company in which Mr. Anderson was the founder and principal stockholder,        
licensed certain medical-related technology to the Company for a 15-year term.  
In exchange for the license, the Med Wireless stockholders in the aggregate     
received 6,600,000 shares, or approximately 44%, of the Company's then          
outstanding common stock. Of that amount, Mr. Anderson and his affiliates       
received 2,868,928, or approximately 19%, of the Company's then outstanding     
common stock.                                                                   

       Camden Holdings, Inc. ("Camden Holdings"), another company controlled
by Mr. Anderson, was active in the development of the business of Med Wireless, 
beginning prior to the acquisition of the Med Wireless technology by the        
Company.                                                                        

     In addition, Camden Holdings was actively involved in the Company's
sale-leaseback program of ultrasound machines, which were marketed primarily to 
doctors, medical clinics and hospitals. Under this program, the Company         
attempted to arrange the purchase of ultrasound machines by investors, who would

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lease the machines to the Company. In turn, the Company would sub-lease the     
ultrasound machines to the end user. Camden Holdings secured purchase orders    
from both investors and prospective end-use lessees of the ultrasound machines. 
These purchase orders were conditioned upon the Company's ability to secure     
financing of its own lease obligations of the ultrasound machines from the      
investors. This was not accomplished because the Company lacked the financial   
resources and credit to obtain such financing. The Company continued to pursue  
attempts to arrange such financing through March 2003.                          

  Also in June 2002, the Company purchased a marketing database of
healthcare providers in the United States from Genesis Healthtech, Inc.         
("Genesis"), a wholly-owned subsidiary of Camden Holdings, which was controlled 
by Mark Roy Anderson. The total purchase price of $300,000 was satisfied by the 
issuance of 666,667 shares of the Company's common stock. The database was      
purchased with the intention of marketing the Company's sale-leaseback program  
of ultrasound machines. When the Company was unable to make the sale-leaseback  
program commercially viable, the marketing database became useless to the       
Company.                                                                        

      In order to focus the Company's then-primary business opportunity in
healthcare technology, the Company divested its non-core businesses in gaming,  
oil and gas and tobacco, during the period that Mr. Anderson exerted his        
influence over the Company. In October 2002, the Company sold its Latin America 
gaming businesses, Latin American Casinos Del Peru S.A., a Peruvian corporation,
and Latin American Casinos of Colombia LTDA, a Colombian corporation, to Casino 
Venture Partners ("CVP"), another entity controlled by Mr. Anderson.            

 Also in October 2002, the Company sold its Canadian oil and gas
development businesses, NuWay Resources, Ltd., to Summit Oil & Gas, Inc.        
("Summit Oil"), yet another entity which was controlled by Mr. Anderson. In     
November 2002, World's Best Rated Cigars, Inc., the Company's wholly-owned      
subsidiary, which was engaged in the distribution and sale of premium brand     
cigars, was shut down and discontinued. See Note 3 to Notes to Consolidated     
Financial Statements and "Certain Parties and Related Transactions".            

        As a result of all of the foregoing transactions with Mr. Anderson and
companies controlled by Mr. Anderson, the Company believes that Mr. Anderson was
the beneficial owner of an aggregate of 5,777,479 shares, or more than 30%, of  
the Company's common stock outstanding as of December 31, 2002, assuming Mr.    
Anderson beneficially owned all the shares at the same time. The Company        
believes that Mr. Anderson sold some of the shares which were issued pursuant to
the Company's 2002 Consultant Equity Plan (the "2002 Plan"), and as such the    
number and percentage of the Company's common stock held by Mr. Anderson at any 
one time may have been less than that indicated above. In any event, Mr.        
Anderson failed to file any reports with the Securities and Exchange Commission 

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10KSB 6th Page of 96 TOC 1st Previous Next ↓Bottom Just 6th
("SEC") on Schedules 13D or 13G, or on Forms 3 or 4, and, therefore, the Company
cannot confirm any of these numbers at any given point in time.                 

  By the end of 2002 and into the beginning of 2003, it had become
apparent to the Company that Mr. Anderson had divergent business objectives to  
those of the Company, and the Company had concerns about additional dealings    
with Mr. Anderson. In March 2003, the relationship between the Company and Mr.  
Anderson reached a climax when the Company severed its business relationships   
with Mr. Anderson. At that time, the Company actively supported Dennis Calvert, 
the Company's current President, in his purchase of Mr. Anderson's interests in 
the Company. New Millennium Capital Partners, LLC, a Nevada limited liability   
company ("New Millennium") controlled by Mr. Calvert, purchased the Company's   
promissory note in the principal amount of $1,120,000 and an aggregate of       
4,182,107 shares of the Company's common stock from various entities controlled 
by Mr. Anderson, although the total number of shares purchased is in dispute.   
The transaction was executed as part of a plan to remove Mr. Anderson totally   
from any involvement in the Company and provide a completely new focus and      
direction for the Company under new management led by Mr. Calvert.              

Please see "Related Parties and Certain Transactions" for more
information regarding these businesses and the relationship between the Company 
and Mark Roy Anderson.                                                          

       Since March 2003, new management of the Company has struggled to deal
with the following issues, often simultaneously:                                

      o     Limited capital resources in a prolonged period of difficulty in the
        capital markets, especially for small public companies, creating
   severe limitations on the Company's ability to maintain its
           reporting obligations under the Securities Exchange Act of 1934, as
 amended (the "Exchange Act"), and its business operations

    o     Trying to exploit technologies or businesses that existed when Mr.
Calvert took the helm of management                     

     o     Determining which businesses were worth pursuing and which were not

o     Trying to acquire or develop new businesses                   

 o     Because of the scarcity of cash on hand, using common stock and
  securities convertible into common stock to bring on board
            employees, directors, consultants, professional service provides and
advisors                                                

 o     Because of the scarcity of cash on hand, using common stock and
      securities convertible into common stock to acquire businesses

     o     Dealing with inquiries from the SEC regarding certain practices and
           transactions in the Company's past, past including questions raised
      about any continued involvement of Mr. Anderson in the ongoing
business of the Company                                 

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     o     Dealing with the NASDAQ Qualifications Panel hearing process in May
2003                                                    

   o     Dealing with the delisting of the Company's common stock from the
NASDAQ Small Cap Market                                 

  o     Dealing with inquiries from the Federal Bureau of Investigations
     ("FBI") related to any past dealings with Mr. Anderson or his
affiliates                                              

 o     Dealing with litigation with former officers of the Company and
        related litigation stemming from their leadership of the Company

         These issues present extraordinary challenges to management as it tries
slowly to turn the situation around. The Company is presently focused primarily 
on maintaining the corporate entity, complying with its reporting obligations   
under the Securities Exchange Act and seeking new business opportunities,       
including without limitation, healthcare and technology businesses. The Company 
will need working capital resources to maintain the Company's status and satisfy
its reporting obligations, and to fund other anticipated costs and expenses     
during the year ending December 31, 2004 and beyond. The Company's ability to   
continue as a going concern is dependent on the Company's ability to raise      
capital to, at a minimum, meet its corporate maintenance requirements and       
reporting obligations. If the Company is able to acquire an ongoing business    
and/or technology that must be exploited, it would need additional capital until
and unless that prospective operation is able to generate positive working      
capital sufficient to fund the Company's cash flow requirements form operations.

         The Company was initially organized as Repossession Auction, Inc. under
the laws of the State of Florida in 1989. In 1991, the Company merged into a    
Delaware corporation bearing the same name. In 1994, the Company's name was     
changed to Latin American Casinos, Inc. to reflect its focus on the gaming and  
casino business in South and Central America, and in 2001 the Company changed   
its name to NuWay Energy, Inc. to reflect its new emphasis on the oil and gas   
development industry. During October 2002, the Company's name was changed to    
NuWay Medical, Inc. coincident with the divestiture of its non-medical assets   
and the retention of new management.                                            

IMPAIRED ASSETS AND DISCONTINUED BUSINESSES.                                    

Med Wireless and PRLS Technologies                            

      Management of the Company deemed it necessary to discontinue the Company's
attempt to develop and market the Med Wireless and Player Record  Library System
("PRLS") technologies,  because the Company was unable to raise additional funds
to further develop and market those  technologies.  The Med Wireless  technology
consists of software that is compliant with the Health Insurance Portability and

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10KSB 8th Page of 96 TOC 1st Previous Next ↓Bottom Just 8th
         Accountability  Act ("HIPAA"),  to electronically  organize,  store and
retrieve  medical  records and medical  images.  Although the formal decision to
discontinue  the  operations  was made  subsequent  to December  31,  2003,  the
Company's  financial  statements  for the year ended December 31, 2003 reflect a
discontinued  operations  segment related to the abandonment of the exploitation
of the Med Wireless and PRLS  technologies  after a charge to  impairment  in an
amount equal to the  remaining  net book value of the acquired  technology.  See
Note 3 to Notes to Consolidated Financial Statements.                           

         Based on the rapid increase in the number of well-capitalized companies
offering competing  technologies,  as well as the fact that the Company has been
unable to continue funding any technology enhancements or development related to
the Med Wireless  technology,  management  came to believe that the Med Wireless
technology  had lost the  ability  to be a viable  competing  technology  in its
sector and that it was not in the Company's  best interest to continue to pursue
the  Med  Wireless  technology.  Moreover,  management  is  doubtful  if the Med
Wireless technology will be considered of any significant value to a prospective
buyer or licensee of the  technology.  The  Company is  attempting  to sell this
technology,  but expects to realize only nominal net  proceeds,  if any, for the
technology.                                                                     

         In addition,  the Company has abandoned its efforts to market a variety
of products and services to the sports  industry  with an emphasis on health and
technology related products. In 2003, the Company focused its primary efforts on
developing and marketing  PRLS, a technology  product that is derived,  in part,
from the Med Wireless technology.  In December 2002, the Company had established
NuWay Sports,  LLC ("NuWay Sports"),  to develop and market the PRLS technology.
NuWay Sports is owned 51% by the Company and 49% by former NFL  football  player
Kenyon Rasheed.                                                                 

     PRLS is a highly specialized electronic medical record and workflow
process software application, designed to address the information technology    
needs of the sports industry relating to player health, and create a secure     
database for athlete/patient medical data that could be acquired, displayed,    
analyzed, interpreted and archived in a completely digital format that is       
HIPAA-compliant. With PRLS, player medical data and images (x-rays, CT scans,   
MRIs, sonograms, etc.) can be electronically acquired and archived in a digital 
format with enough resolution to allow for medical diagnostics. The database of 
scanned images and associated data is encoded, encrypted and password protected.
The records are accessible over a private network or the Internet, and can be   
displayed, analyzed and interpreted by team doctors and other authorized        
officials. The system provides a complete audit trail of keystrokes and a       
detailed workflow process for all users.                                        

       The Company has entered into discussions for the sale of NuWay Sports
to a party unrelated to the Company or, to its knowledge, to Mark Roy Anderson. 
If these negotiations result in a consummated transaction, it is not likely that
the Company would receive any up-front cash payments. It should also be noted   
that because Augustine II, LLC (the "Augustine Fund"), a creditor of the        
Company, has a lien on the Company's 51% membership interest in NuWay Sports,   
they would have to approve any such sale. See "Management's Discussion and      

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Analysis of Financial Condition and Results of Operations - Liquidity and       
Capital Resources". To the Company's knowledge, the Augustine Fund is not       
affiliated with Mr. Anderson or any of his affiliated companies.                

     During 2003, the Company terminated strategic alliances it had with
Think Tank Systems and Radlink, Inc. Think Tank is a reseller of IBM equipment  
and provided computer equipment used in connection with the PRLS technology.    
Radlink is a specialized technology provider that converts medical images from a
film based medium to a digital format, and whose services were used in          
connection with the PRLS technology.                                            

Ultrasound Machine Sale-Leaseback Program                                       

    Under the Company's ultrasound machine sale-leaseback program, the
Company attempted to arrange the purchase of ultrasound machines by investors,  
who would lease the machines to the Company. In turn, the Company would         
sub-lease the ultrasound machines to the end user. Camden Holdings secured      
purchase orders from both investors and prospective end-use lessees of the      
ultrasound machines. These purchase orders were conditioned upon the Company's  
ability to secure financing of its own lease obligations of the ultrasound      
machines from the investors. This was not accomplished because the Company      
lacked the financial resources and credit to obtain such financing.             

    The Company continued to pursue attempts to arrange such financing
through March 2003. Thereafter, the Company focused primarily on the Med        
Wireless and PRLS technologies and, after occasional attempts to pursue the     
sale-leaseback program through mid-2003, this program was no longer pursued.    

         The termination of the sale-leaseback program also rendered useless the
marketing database, which the Company had purchased from Genesis, a wholly-owned
subsidiary of Camden Holdings. The database had been purchased with the         
intention of marketing the Company's sale-leaseback program of ultrasound       
machines.                                                                       

Please see "Related Parties and Certain Transactions" for more
information regarding these businesses and the relationship between the Company 
and Mark Roy Anderson.                                                          

ABANDONED ACQUISITION                                                           

On January 31, 2004, the Company entered into a Stock Purchase
Agreement (the "Stock Purchase Agreement") with Premium Medical Group, Inc., a  
Florida corporation ("PMG") and PMG's sole stockholders, Eduardo A. Ruiz and    
Luis A. Ruiz (the "PMG Stockholders"). Prior to this transaction, there was no  
business or other relationship between the Company and its affiliates and PMG or

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the PMG Stockholders and, to the Company's knowledge, there was no business or  
other relationship between PMG or the PMG Stockholders and Mark Roy Anderson.   

         Pursuant to the Stock Purchase Agreement, the Company agreed to acquire
100% of the shares of PMG from the PMG Stockholders in exchange for 30,000,000  
shares of the Company's common stock, subject to certain adjustments. The exact 
number of Company Shares to be issued to the PMG Stockholders was subject to    
adjustment in the event certain revenue was or was not generated by PMG during  
one year following the closing of the transaction. PMG had been organized in    
June 2003 to provide medical products to hospitals and medical clinics in South 
America, primarily Venezuela. Luis A. Ruiz became a director of the Company in  
connection with the transaction.                                                

     The parties had a difference in expectations regarding who would be
ultimately responsible for paying for the audit of PMG that was required in     
order for the Company to complete its disclosure obligations under the          
Securities Exchange Act. Additionally, the Company did not have a sufficient    
number of authorized and unissued shares of its common stock to both satisfy its
obligations to the PMG Stockholders and to issue shares of common stock in a    
meaningful financing transaction, given the low price per share at which the    
Company's common stock trades. The Company lacked the financial resources to    
schedule a stockholders' meeting, prepare a proxy statement and solicit proxies 
for the purpose of amending its Certificate of Incorporation to increase its    
authorized capital stock.                                                       

   As a result of these and other factors, the Company and PMG never
consolidated their operations, the Company never exercised control over PMG or  
its operations and the parties never exchanged stock certificates evidencing    
their ownership in each other.                                                  

        Therefore, the parties entered into discussions and concluded amicably
that it was in the mutual best interest of the respective companies and their   
respective stockholders, to rescind the transactions provided for in the Stock  
Purchase Agreement and return all parties to their respective positions prior to
the transactions contemplated in the Stock Purchase Agreement.                  

     The parties entered into a Rescission Agreement on October 14, 2004
that provides, in relevant part, that (i) all transactions contemplated by the  
Stock Purchase Agreement shall be rescinded as if the Stock Purchase Agreement  
had never been executed and delivered; (ii) the parties forever waive all rights
to receive stock in PMG and the Company, as the case may be; (iii) Luis A. Ruiz 
shall resign as a director of the Company; and (iv) the Company and PMG shall   
file appropriate documents with the Secretary of State of the State of Florida  
with respect to the rescission of the exchange of shares provided for in the    
Stock Purchase Agreement.                                                       

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EMPLOYEES                                                                       

     At December 31, 2003, the Company employed two full-time employees,
reflecting the reduced operations of the Company at that time.                  

RISK FACTORS                                                                    

     The Company faces a number of significant risks associated with its
current plan of operations. These include the following:                        

  WE HAVE A LIMITED OPERATING HISTORY AND A HISTORY OF LOSSES. The
Company has no current operations and, as such, may not be able to overcome     
unanticipated difficulties that may be encountered related to the implementation
of its business plan. The Company has a limited operating history, limited      
revenue from operations and a history of losses. In addition, because the       
Company currently has no operations, the Company faces all of the risks inherent
with a start-up business, including the possibility that the Company cannot     
acquire or develop a business that is viable. There is no assurance that, if the
Company does find or develop a business, to acquire, whether such business will 
ever be profitable. The Company may also face unforeseen problems, difficulties,
expenses or delays in implementing its business plan.                           

      WE NEED ADDITIONAL FUNDS. If it necessary for the Company to seek to
secure additional funds for any new business, general and administrative        
expenses and period reporting requirements, there can be no assurance that such 
funds will be available, or will be available on favorable terms. Failure to    
secure needed funds will directly impact the Company's ability to maintain its  
publicly-traded status and, potentially, the corporate entity itself. While     
management has dedicated itself to the efforts to secure needed funds, the      
outcome and ultimate success of those efforts is uncertain.                     

        THE COST OF MAINTAINING OUR REPORTING OBLIGATIONS IS HIGH. The Company
is obligated to maintain its periodic public filings and public reporting       
requirements, on a timely basis, to remain a public company and maintain its    
registration as a listed stock. In order to meet these obligations, the Company 
will need to continue to raise capital. If adequate funds are not available to  
the Company, it will be unable to comply with those requirements and could cease
to be qualified to have its stock traded in the public market. The Company has a
history of delinquencies in its filing obligations with the Securities and      
Exchange Commission.                                                            

    OUR STOCKHOLDERS FACE POTENTIAL DILUTION IN ANY NEW FINANCING. Any
additional equity that the Company raises would dilute the interest of the      
current stockholders and any persons who may become stockholders before such    
financing. Given the low price of the Company's common stock, such dilution in  
any financing of a meaningful amount, could be substantial.                     

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      OUR STOCKHOLDERS FACE POTENTIAL ADVERSE EFFECT FROM THE TERMS OF ANY
NEWLY ISSUED PREFERRED STOCK. In order to raise capital to meet expenses or to  
acquire a business, the Board of Directors of the Company may issue additional  
stock, including preferred stock. Any preferred stock which the Company may     
issue may have voting rights, liquidation preferences, redemption rights and    
other rights, preferences and privileges. The rights of the holder's of the     
Company's Common Stock will be subject to, and in many respect subordinate to,  
the rights of the holders of any such preferred stock. Furthermore, such        
Preferred Stock may have other rights, including economic rights, senior to the 
Company's Common Stock that could have a material adverse effect on the value of
the Company's Common Stock. Preferred stock, while providing desirable          
flexibility in connection with possible acquisitions and other corporate        
purposes, can also have the effect of making it more difficult for a third party
to acquire a majority of outstanding voting stock of the Company, thereby       
delaying, deferring or preventing a change in control of the Company.           

WE HAVE BEEN UNABLE TO OBTAIN A QUORUM AND SCHEDULE A VOTE OF 
STOCKHOLDERS TO APPROVE CERTAIN MATERIAL TRANSACTIONS. The Company will be      
required to amend its charter to increase the authorized number of shares to    
approve a transaction with New Millennium, which is controlled by our President 
Dennis Calvert, raise funds or acquire new businesses, which is both costly and 
uncertain as to its success. The Company has attempted to secure stockholder    
votes for certain corporate actions in the past and has been unable to secure a 
quorum. As a result, the Company has been unable to effect certain material     
transactions, and this inability to act could threaten the viability of the     
Company.                                                                        

         IF WE ACQUIRE OR DEVELOP ANY BUSINESS, WE WILL BE DEPENDENT UPON MARKET
ACCEPTANCE AND COMPETITIVE FACTORS. The success of any business the Company     
acquires or develops will be highly dependent upon, among other things, gaining 
market acceptance from customers that will use the company's products and       
services. More specifically, these factors include how well its products or     
services perform (ease of implementation, ease of use by customers, reliability,
and scope of products and services), competitive forces, the level of consumer  
demand for products and services offered, the selling prices of its products and
services, and the effectiveness of the Company's marketing activities.          

       OUR COMMON STOCK IS THINLY TRADED AND LARGELY ILLIQUID. In June 2003,
our common stock was delisted from the NASDAQ SmallCap Market. Our stock        
currently trades on the Pink Sheets. The delisting has made it more difficult to
buy or sell our stock and has lead to a significant decline in the frequency of 
trades and trading volume. The delisting will likely adversely affect the       
Company's ability to obtain financing in the future due to the decreased        
liquidity of the Company's shares. There can be no assurance when or if the     
Company's stock will be quoted on the OTC Bulletin Board, in light of the public
interest concerns raised by NASDAQ in connection with the delisting of the      
Company's shares.                                                               

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   OUR COMMON STOCK IS SUBJECT TO "PENNY STOCK" REGULATIONS THAT MAY
AFFECT THE LIQUIDITY FOR OUR COMMON STOCK. Our common stock is subject to the   
rules adopted by the Securities and Exchange Commission that regulate           
broker-dealer practices in connection with transactions in "penny stocks." Penny
stocks are generally equity securities with a price of less than $5.00 (other   
than securities registered on certain national securities exchanges or quoted on
the NASDAQ Stock Market, provided that current price and volume information with
respect to transactions in such securities is provided by the exchange or       
system).                                                                        

       The penny stock rules require a broker-dealer, prior to a transaction
in a penny stock not otherwise exempt from those rules, deliver a standardized  
risk disclosure document prepared by the Securities and Exchange Commission,    
which contains the following:                                                   

 o     a description of the nature and level of risk in the market for
   penny stocks in both public offerings and secondary trading

      o     a description of the broker's or dealer's duties to the customer and
            of the rights and remedies available to the customer with respect to
          violation to such duties or other requirements of Securities' laws

     o     a brief, clear, narrative description of a dealer market, including
       "bid" and "ask" prices for penny stocks and significance of the
spread between the "bid" and "ask" price                

     o     a toll-free telephone number for inquiries on disciplinary actions;
         definitions of significant terms in the disclosure document or in
the conduct of trading in penny stocks, and             

 o     such other information and is in such form (including language,
          type, size and format), as the Commission shall require by rule or
regulation.                                             

      Prior to effecting any transaction in penny stock, the broker-dealer
also must provide the customer the following:                                   

o     the bid and offer quotations for the penny stock              

  o     the compensation of the broker-dealer and its salesperson in the
transaction                                             

 o     the number of shares to which such bid and ask prices apply, or
           other comparable information relating to the depth and liquidity of
the market for such stock                               

o     the depth and liquidity of the market for such stock, and     

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   o     monthly account statements showing the market value of each penny
stock held in the customer's account.                   

        In addition, the penny stock rules require that prior to a transaction
in a penny stock not otherwise exempt from those rules, the broker-dealer must  
make a special written determination that the penny stock is a suitable         
investment for the purchaser and receive the purchaser's written acknowledgment 
of the receipt of a risk disclosure statement, a written agreement to           
transactions involving penny stocks, and a signed and dated copy of a written   
suitably statement. These disclosure requirements may have the effect of        
reducing the trading activity in the secondary market for a stock such as our   
common stock if it is subject to the penny stock rules.                         

   THE COMPANY, SOME OF ITS DIRECTORS AND ITS OFFICERS FACE RISKS IN
CONNECTION WITH THE CRIMINAL INVESTIGATION OF A FORMER CONSULTANT AND PRINCIPAL 
STOCKHOLDER OF THE COMPANY. In or about May 2003, the Company learned through   
verbal discussions with representatives of NASDAQ, in preparation for the       
Company's pending NASDAQ qualifications hearing, that Mark Roy Anderson had a   
criminal background. In or about May and June 2003, the Company was informed in 
writing by the United States Attorney's office in Los Angeles, that Mr. Anderson
(i) was the target of a criminal investigation (the "Investigation") pertaining 
to the sale of securities by Med Wireless (from which the Company licensed      
certain assets in 2002), and (ii) had been convicted of multiple felonies       
unrelated to Med Wireless in the 1990s. Mr. Anderson was the founder and        
principal stockholder of Med Wireless, and first introduced the concept of      
licensing the Med Wireless software application and contracts to the Company in 
May 2002.                                                                       

        Dennis Calvert had been approached initially by Mr. Anderson some time
in 1996 to consider entering into a business consulting relationship with       
Anderson-controlled entities. Over the period from 1996 to 2001, Mr. Calvert    
worked as a consultant periodically with Anderson-related entities for the      
purpose of evaluating potential new businesses and potential investment         
opportunities being considered by Mr. Anderson and these entities. In June 2002,
Mr. Calvert agreed to become president of Med Wireless, primarily for the       
purpose of completing the Med Wireless transaction with the Company. As         
consideration for his agreeing to become President of Med Wireless, Mr. Calvert 
received 1,327,700 shares of Med Wireless stock from Mr. Anderson's holdings.   
These shares were subsequently converted into 600,000 shares of the Company's   
common stock pursuant to the terms of the transaction between Med Wireless and  
the Company.                                                                    

       On June 28, 2002, Mr. Calvert was appointed president of the Company.
At the same time, Joseph Provenzano, who at that time was an employee of Camden 
Holdings, another affiliate of Mr. Anderson, joined the Company's board of      
directors. In addition to the Med Wireless transaction, and as disclosed        

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elsewhere in this Annual Report, entities that Mr. Anderson controls, including 
Camden Holdings, Genesis, Summit Oil and CVP, invested $250,000 in the Company, 
sold the Company additional assets and purchased the Company's previous         
operating businesses. See "Related Parties and Certain Transactions".           

     Although Mr. Anderson never served as an officer or director of the
Company, he served as a consultant to the Company and received consulting fees  
in the form of an aggregate 1,241,884 shares of the Company's common stock.     
Since December 2002 Mr. Anderson has not been a consultant to the Company and   
since March 2003 has not been involved in any way in the Company's operations.  
In the purchase agreement between Mr. Anderson, his affiliates and New          
Millennium in March 2003 (the "New Millennium Agreement"), Mr. Anderson         
represented that he was selling 100% of his stock to New Millennium and would no
longer own any of the Company's stock. Mr. Calvert is the Manager and, together 
with his wife, the sole member of New Millennium, and this transaction was      
engaged in to eliminate Mr. Anderson as a stockholder of the Company and to     
remove him from any involvement in the operations of the Company.               

   Subsequent to the closing of that transaction, management learned
through the Company's transfer agent that Camden Holdings still owns 340,894    
shares of the Company's common stock. The Company and New Millennium believe    
that the existence of these 340,894 shares of the Company's common stock owned  
by Camden Holdings Inc. is a material breach of the New Millennium Agreement,   
and the Company and New Millennium are reviewing their respective legal rights  
with regards to this matter.                                                    

     Technically, under the terms of the New Millennium Agreement, it is
possible that Camden Holdings or Mr. Anderson has the right to reacquire the    
shares of the Company's common stock that were sold to New Millennium, if New   
Millennium defaults on the promissory note issued by New Millennium to Camden   
Holdings to purchase the shares (the "New Millennium Note"). See "Related       
Parties and Certain Transactions". The New Millennium Note is purportedly       
secured by the purchased shares of the Company's common stock; however, New     
Millennium and Mr. Calvert believe that Camden Holdings and Mr. Anderson have   
not perfected their security interest in those shares. New Millennium has       
defaulted on the New Millennium Note. However, New Millennium believes that     
Camden Holdings failed to deliver all the shares of the Company held by Camden  
Holdings, and thus breached the terms of their purchase agreement, making the   
New Millennium Note void by its terms. In addition, the Augustine Fund is the   
pledgee of 2,500,000 of these shares and holds those shares as pledgee.         

       On or about May 17, 2003, the Company was served by a subpoena issued
by the grand jury impaneled to investigate Mr. Anderson, requesting documents   
relating to Mr. Anderson and his affiliates, including Med Wireless, Camden     

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Holdings, Summit Oil and Gas, and Summit Health Care. Additionally, the subpoena
requested information relating to the identity of the Company's officers,       
directors, shareholders and consultants (legal, accounting and otherwise), and  
that the Company provide copies of its filings and correspondence with the SEC, 
the National Association of Securities Dealers and the NASDAQ Stock Market. The 
Company cooperated fully with that request by providing the requested           
information and intends to continue to cooperate fully with the investigation.  

    In mid-2003, the Company was also informed by the Assistant United
States Attorney handling the Investigation that, although Dennis Calvert and    
Joseph Provenzano are not currently considered "targets" of the Investigation   
(and, to their knowledge, are as of the date of the filing of this Annual Report
still not "targets" of the Investigation whereas Mr. Anderson is still a        
"target" of the Investigation), until their respective roles, if any, in the    
specific events being investigated are determined, they will be considered to be
"subjects" of the Investigation, meaning that their conduct is believed by the  
U.S. Attorney's office to be "within the scope" of the grand jury's             
investigation.                                                                  

         The Company has learned that private placement memoranda distributed to
Med Wireless investors stated that Dennis Calvert was the president of Med      
Wireless as early as 2001, and additionally believes that Mr. Anderson          
apparently made a number of similar false representations throughout 2001 and   
2002. Mr. Calvert did not approve this disclosure contained in those private    
placement memoranda nor in any other form, and has informed the Company that he 
was not engaged as the president of Med Wireless until June 2002 and not any    
earlier, and that any statements to the contrary are untrue.                    

        Mr. Provenzano joined Camden Holdings in 2001 to assist in its mergers
and acquisitions department, and he worked at Camden Holdings until March 2003. 
Both Mr. Calvert and Mr. Provenzano have informed both the Company and, through 
their own legal counsel, the Assistant U.S. Attorney, that they intend to       
cooperate fully with law enforcement officials in the Investigation.            

      Although neither the Company nor any of its officers or directors is
currently the target of any criminal investigation, there can be no assurance   
that such an investigation will not be undertaken. Additionally, although       
neither the Company nor its officers or directors have been contacted by either 
the U.S. Attorney's Office, or the FBI regarding the Investigation since June   
2003, neither the Company nor its officers and directors can be certain that    
such requests will not be made in the future. Furthermore, the ongoing          
Investigation has in the past occupied, and may in the future occupy, a         
significant amount of time of the Company and Messrs. Calvert and Provenzano,   
creating a distraction from the Company's business. The mere existence of the   
Investigation, not to mention the outcome thereof, depending upon such outcome, 
could have a material adverse effect on the Company.                            

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         THE COMPANY MAY HAVE VIOLATED CERTAIN SECURITIES LAWS AND IS DELINQUENT
IN ITS SEC FILINGS. While the Company and its management seek to operate fully  
within the scope of the law and fulfill any and all regulatory obligations, the 
Company has been subject to informal inquiries by the civil enforcement division
of the SEC for possible securities violations in the past, including the acts of
Mark Roy Anderson.                                                              

    On June 3, 2003 and September 8, 2003, the Company was served with
requests for documentation by the civil enforcement division of the SEC in      
connection with a non-public inquiry into possible violations by the Company of 
the federal securities laws. Although the request provides that the inquiry     
should not be construed as an indication by the SEC that the law has been       
violated, there can be no assurance that the Company will not, as a result of   
the inquiry, become the target of a formal SEC investigation. The Company cannot
predict the amount of time and resources that management will need to devote to 
the inquiry, or the results thereof. In the event the inquiry results in a      
formal investigation, such expenditures of time and resources will likely be    
significant. In addition, there can be no assurance that stockholders or other  
regulatory authorities will not initiate proceedings against the Company and/or 
its officers and directors as a result of past securities law violations, if    
any, which could have a material adverse effect on the Company. The Company     
intends to cooperate fully with the SEC in all aspects of its inquiry.          

         On or about August 19, 2004, the Company received a "Wells Notice" from
the SEC that the Company is delinquent in its filing of periodic reports with   
the SEC and the staff of the SEC may recommend enforcement proceedings be       
commenced against the Company. The Company is working diligently to file all    
delinquent reports as quickly as possible and as funds become available to      
compensate the Company's professional advisors. However, the Company will likely
continue to face close scrutiny of its current and future activities. The       
outcome of this matter, including the possibility that the SEC might commence   
proceedings against the Company seeking the deregistration of the Company's     
stock, could have a material adverse effect on the Company in the future.       

ITEM 2. DESCRIPTION OF PROPERTY                                                 

        As of December 31, 2003, the Company maintained its principal place of
business at 23461 South Pointe Drive, Suite 200, Laguna Hills, California 92653.
The lease for the office was on a month-to-month basis, and was cancelable by   
either party with sixty days' written notice. Monthly rent was $7,850, payable  
in cash or shares of the Company's common stock, valued at the then-current     
market price. In 2003, the Company recorded $96,560 of rental expense in        
connection with this lease.                                                     

    On April 1, 2004, the Company terminated this lease. The Company's
offices are currently located at 2603 Main Street, Suite 1150, Irvine,          

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California 92615. The Company currently occupies space from a consultant at no  
cost to the Company.                                                            

ITEM 3. LEGAL PROCEEDINGS                                                       

     In June 2002, Geraldine Lyons, the Company's former Chief Financial
Officer, sued the Company and the Company's former president Todd Sanders, for  
breach of her employment contract. The lawsuit was brought in the Circuit Court 
of the 11th Judicial Circuit in Miami-Dade County in Florida. Ms. Lyons seeks   
approximately $25,000 due under the contract and the issuance of 100,000 shares 
of common stock, with a guarantee that the stock could be sold by Ms. Lyons for 
$300,000. Ms. Lyons alleges that additional funds are due under her employment  
contract; that the contract requires the Company guarantee that she can sell for
$300,000 the 100,000 shares of stock the Company is required to issue her; and, 
that Mr. Sanders promised to purchase from her 100,000 shares of Company common 
stock held by her at the price of $4.00 per share.                              

      The Company has counter-sued Ms. Lyons for breach of fiduciary duty,
fraud, violation of Section 12(a)(2) of the Securities Act of 1933, violation of
Section 517.301 of the Florida Statutes, negligent misrepresentation, conversion
and unjust enrichment resulting from the required restatement of the Company's  
financial statements for the years ended December 31, 2000 and December 31,     
1999. The restatements corrected the previous omission of certain material      
expenses related primarily to compensation expense arising from warrants issued 
and repriced stock options, as well as other errors.                            

       The case is ongoing at this time, although it is not being vigorously
prosecuted by Ms. Lyons or the Company, in the Company's case primarily because 
the Company currently lacks the resources to do so. While the Company believes  
that it has meritorious positions in this litigation, given the inherent nature 
of litigation, it is not possible to predict the outcome of this litigation or  
the impact it would have on the Company.                                        

        In May 2004, the Company was sued by Flight Options, Inc., a jet plane
leasing company, in the Superior Court of Orange County California. The lawsuit 
alleges that the Company owes Flight Options approximately $418,300, pursuant to
a five-year lease assigned to the Company by the Company's former president Todd
Sanders, from his corporation, Devenshire Management Corporation. Management of 
the Company believes that the assignment of the lease was not properly          
authorized or approved by the Company, and that by Mr. Sander's failure to      
identify the lease in a December 2002 settlement agreement with the Company, he 
breached the terms of that settlement agreement and, pursuant to the settlement 
agreement, must indemnify the Company for any losses owed to Flight Options. The
Company has cross-complained against Mr. Sanders for indemnity, and has added   
the affirmative claim of breach of fiduciary duty. The case is still in its     
initial discovery phase, and the Court recently set the case for trial in       

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April 2005. While the Company believes that it has meritorious positions in this
litigation, given the inherent nature of litigation, it is not possible to      
predict the outcome of this litigation or the impact it would have on the       
Company.                                                                        

 The Company is party to various other claims, legal actions and
complaints arising periodically in the ordinary course of business. In the      
opinion of management, no such matters will have a material adverse effect on   
the Company's financial position or results of operations.                      

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                     

     On December 9, 2003, the Company attempted to conduct a stockholder
meeting to approve the 2003 Plan and the conversion of the Company's Promissory 
Note in the principal amount of $1,120,000, which note is held by New           
Millennium. Dennis Calvert, the Company's President, is the Manager and,        
together with his wife, is the sole shareholder of New Millennium The Company   
was unable to obtain a quorum at the meeting. The meeting was adjourned to      
December 30, 2003, but again the Company was unable to obtain a quorum, and the 
Board adjourned the meeting indefinitely. See "Related Parties and Certain      
Transactions".                                                                  

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PART II                                                                         

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS                

MARKET INFORMATION                                                              

      Since October 31, 1998, the Company's Common Stock and Warrants have
been listed on the NASDAQ Small Cap Market. Since November 22, 2002 the         
Company's common stock has traded under the symbol "NMED". The NASDAQ Stock     
Market suspended trading of the Company's securities as of March 11, 2002       
pending discussion with the Company concerning the Company's restatement of its 
financial statements for the years ending December 31, 1999 and 2000. There is  
pending litigation against the Company's former Chief Financial Officer         
(Geraldine Lyons) regarding this restatement. See "Legal Proceedings". Trading  
was reinstated on April 18, 2002.                                               

    The Company's common stock was delisted from trading on the NASDAQ
SmallCap Market effective June 10, 2003. The NASDAQ Listing Qualifications Panel
had cited numerous concerns, including:                                         

    o     filing delinquencies for certain of the Company's periodic reports
    filed with the SEC under the Securities Exchange Act of 1934

    o     violation of NASDAQ Marketplace Rules regarding the New Millennium
Note conversion without a stockholder vote              

o     violation of NASDAQ Marketplace Rules regarding issuance of   
   securities to directors, officers and consultants without a
stockholder vote                                        

 o     the failure to timely file Listing of Additional Shares ("LAS")
forms with NASDAQ                                       

     o     disclosure practices in the form of press releases and other public
communications about the Company                        

o     lack of independent directors                                 

 o     concerns about the composition of the Company's audit committee

o     failure to maintain the minimum $1 bid price                  

   o     failure to maintain the minimum $2.5 million stockholder's equity

    o     public interest concerns because of the former association of Mark
Royal Anderson with the Company                         

       Following a hearing before the Qualifications Panel requesting waiver
or extension of the time to address and remedy these concerns, the Company      
received the Qualifications Panel's written determination letter on June 6,     
2003. That determination letter set forth the NASDAQ Qualification Panel's      
determination that an exception to the NASDAQ continued listing qualifications  
would not be granted due to the Company's failures to timely file periodic      

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reports (including the existing delinquency regarding the required filing of a  
Form 10-Q for the quarter ended March 31, 2003), to make accurate and timely    
disclosure of material events, to comply with the minimum shareholders' equity  
requirement, and to timely file LAS forms. As a separate and additional basis to
deny the Company's request for continued listing, the Panel cited public        
interest concerns raised by the gravity of the past disclosure violations and   
its belief of the continued significant participation in the Company by Mark Roy
Anderson.                                                                       

The Company's common stock is currently quoted on the National
Quotation Service Bureau, commonly known as the "pink sheets".                  

      The table below represents the quarterly high and low bid prices for
the Company's Common Stock and Warrants for the last two fiscal years as        
reported by NASDAQ through June 10, 2003 and as reported by Historical Stock    
Price Reports available at www.yahoo.com thereafter.                            

                       Common Stock High/Low Bid Prices:

2002              1st Quarter         $2.12             $1.25 
                 2nd Quarter         $1.66             $0.23
                 3rd Quarter         $1.00             $0.15
                 4th Quarter         $0.60             $0.13

2003              1st Quarter         $0.25             $0.10 
                 2nd Quarter         $0.14             $0.08
                 3rd Quarter         $0.09             $0.05
                 4th Quarter         $0.06             $0.04

       The closing price for the Company's common stock on December 31, 2003
was $.04 per share and on October 21, 2004 it was $.0008 per share.             

        As of October 21, 2004, there were approximately 280 registered owners
and of the Company's common stock.                                              

   At December 31, 2003, the Company also had the following warrants
outstanding:                                                                    

    o     stock purchase warrants to purchase an aggregate 300,000 shares of
     the Company's common stock, which warrants had been issued in
       private offerings. These warrants permit the holder to purchase
      shares of common stock at an exercise price of $1.75 per share
through December 11, 2005.                              

     o     stock purchase warrants to purchase 100,000 shares of the Company's
        common stock at $0.30 per share, which were granted in 2002 to a
former executive in connection with his resignation.    

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    o     stock purchase warrants to purchase an aggregate 519,322 shares of
     the Company's common stock, which warrants had been issued in
          private offerings. These warrants allow for the holder to purchase
      shares of common stock at an exercise price of $0.20 per share
          through March 7, 2006 (120,000 shares) and April 15, 2006 (399,322
shares).                                                

      o     stock purchase warrants to purchase an aggregate 6,158,381 shares of
       the Company's common stock, which warrants had been issued in a
        private offering to the Augustine Fund. These warrants initially
       allowed for the holder to purchase shares of common stock at an
           exercise price of $0.16 per share through August 10, 2008, but were
            re-priced in 2004 (in conjunction with an extension of the financing
provided by Augustine Fund LLC) to $0.035 per share.    

    o     stock purchase warrants to purchase an aggregate 333,333 shares of
       the Company's common stock, which warrants had been issued to a
        consultant that provided services to the Company. These warrants
     allow for the holder to purchase shares of common stock at an
  exercise price of $0.06 per share through August 29, 2008.

     o     unvested stock purchase warrants to purchase an aggregate 2,000,000
       shares of common stock at $0.05 a share. If vested, the warrant
           would expire on October 29, 2004. The Warrant does not vest, and is
           thus not exercisable, unless and until the Holder introduces to the
         Company an investor or investors which invest net proceeds in the
         Company of at least $250,000 within 3 months of the introduction.
            The closing of any such investment shall be in the sole and absolute
            discretion of the Company. In order to vest, the investment(s) of at
          least $250,000 must be made by May 1, 2004. This condition was not
met, and thus the warrant did not vest and has expired. 

DIVIDENDS                                                                       

         The Company has never declared or paid a cash dividend to stockholders.
The board of directors presently intends to retain any earnings which may be    
generated in the future to finance Company operations.                          

EQUITY SECURITIES SOLD WITHOUT REGISTRATION                                     

       The Company engaged in the following sales of unregistered securities
during the fiscal year ended December 31, 2003:                                 

      In January 2003, the Company issued 62,500 shares of common stock to
William Bossung, former Chief Operating Officer of the Company, in connection   

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with the exercise of options that had previously been issued to Mr. Bossung. The
options were "cashless" and the Company received no proceeds from this exercise.

         In March 2003, the Company entered into two Convertible Preferred Stock
and Warrant Purchase Agreements whereby the Company sold an aggregate of 338,022
shares of a newly created series of Preferred Stock, Series A Convertible       
Preferred Stock, par value $.00067, to private investors, for a total           
consideration of $169,011. Each share of Series A preferred stock is convertible
into one share of the Company's common stock. In addition, for each share of    
Series A preferred stock purchased, the investor received a warrant to purchase 
one share of common stock at a price of $.20 per share. The Series A preferred  
stock may be converted by the holder at any time after six months from the      
purchase date and the warrant is exercisable for a period of three years from   
the purchase date.                                                              

     In April 2003, the Company received an additional $110,650 from the
sale of an additional 221,300 shares of Series A Preferred Stock and one share  
of common stock, at a price of $.20 per share, to the same investors pursuant to
the same purchase agreements.                                                   

     In April 2003, the Company issued 200,000 shares of common stock to
Cygni Capital in exchange for services provided the Company.                    

      The Company issued shares of common stock in partial satisfaction of
payment of outstanding notes due certain note holders, John Ianetta and Michael 
and Donna Klein. The issuances to these note holders were as follows:           

February 2003 John Ianetta was issued 32,103 shares.          
December 2003 John Ianetta was issued 500,000 shares.         
  February 2003 Michael and Donna Klein were issued 63,903 shares.
   February 2003 Michael and Donna Klein were issued 125,000 shares.

         In September 2003, the Company issued 325,000 shares to Bryan Wolfe and
250,000 shares to Devon Blaine, in exchange for professional services provided  
by each of them to the Company.                                                 

   On October 29, 2003, the Company issued an unvested warrant to an
individual to purchase 2,000,000 shares of common stock at $0.05 a share. The   
warrant expired on October 29, 2004. The Warrant was not exercisable unless and 
until the Holder introduced to the Company an investor or investors who invested
net proceeds of at least $250,000 within three months of the introduction.      

   On November 20, 2003, the Company received proceeds of $50,000 in
exchange for a promissory note in which it agreed to pay $65,000 to the investor
90 days from the date of the loan. The Company's CEO and president Dennis       

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Calvert personally guaranteed the note. The Company has paid back $30,000 to the
investor, and is currently in default on the note.                              

   Subsequent to end of the fiscal year ended December 31, 2003, the
Company has engaged in the following sales of unregistered securities during    
2004:                                                                           

     The Company issued 30,000,000 shares of common stock to the Premium
Medical Group Shareholders in connection with a transaction in which the Company
acquired the outstanding stock of Premium Medical Group. This transaction has   
since been rescinded by the parties. See Note 15 to Notes to Consolidated       
Financial Statements.                                                           

      The Company issued shares of common stock as partial satisfaction of
payment of outstanding notes due certain note holders, John Ianetta and Michael 
and Donna Klein. The issuances to these note holders were as follows:           

February 2004 John Ianetta was issued 500,000 shares.         

   February 2004 Michael and Donna Klein were issued 100,000 shares.

       On February 23, 2004, the Company issued an unvested warrant to Sachi
International, Inc. to purchase up to 3,000,000 shares of common stock at $0.04 
a share. The Warrant vests based on the amount of investment proceeds brought to
the Company by the Holder, with 100% vesting if the Holder brings $500,000 in   
investment capital. In the event less than $500,000 is invested, the warrant    
vests in a pro-rata amount. The closing of any such investment shall be in the  
sole and absolute discretion of the Company. Sachi International, Inc., has not 
met the conditions to vest the warrant.                                         

       In March 2004, the Company issued 200,000 shares to David Wiechert in
exchange for professional services provided to the Company.                     

         In March 2004, the Company issued 3,000,000 shares to three of its four
directors in exchange for services provided to the Company.                     

 All of the above offerings were made in reliance on Rule 506 of
Regulation D and/or Section 4(2) of the Securities Exchange Act.                

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS              

EQUITY COMPENSATION PLAN INFORMATION

                                                        [Enlarge/Download Table]

                                        Number of securities   Weighted average    Number of securities 
                                          to be issued upon   exercise price of  remaining available for
                                             exercise of         outstanding         future issuance    
                                        outstanding options,  options, warrants                         
                                         warrants and rights      and rights                            
     Plan category                               (a)                 (b)                   (c)          
--------------------------------------  --------------------  -----------------  -----------------------
                                                                                                        
Equity compensation plans approved by            0                    0                          0      
security holders                                                                                        

Equity compensation plans not approved           0                    0                 14,541,222      
by security holders                                                                                     

Total                                            0                    0                 14,541,222      

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ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS              

     The following discussion and analysis should be read in conjunction
with our audited consolidated financial statements and the related notes to the 
consolidated financial statements included elsewhere in this report.            

        This discussion contains forward-looking statements that involve risks
and uncertainties. Such statements, which include statements concerning future  
revenue sources and concentration, selling, general and administrative expenses,
research and development expenses, capital resources, additional financings and 
additional losses, are subject to risks and uncertainties, including, but not   
limited to, those discussed above in Part I, Item 1 and elsewhere in this Form  
10-KSB, particularly in "Risk Factors," that could cause actual results to      
differ materially from those projected. The forward-looking statements set forth
in this Form 10-KSB are as of December 31, 2003, and we undertake no duty to    
update this information.                                                        

PLAN OF OPERATIONS                                                              

         The Company had no  continuing  business  operations as of December 31,
2003.  Over the course of several  years,  the  Company has  attempted  to enter
various  businesses  through  the  acquisitions  of entities  operating  ongoing
businesses or technology that needed to be developed and marketed. However, as a
result of various factors, but primarily due to its lack of adequate capital and
the inability to secure financing successfully,  these acquisitions could not be
properly  exploited  and  integrated  to produce  profitable  operations  by the
Company. Management of the Company has elected to dispose or discontinue through
sales or other means,  these  acquisitions,  including the Company's  attempt to
develop and market the 15-year  licensing  rights  acquired from Med Wireless in
July 2002.  The Med Wireless  technology  consists of software that is compliant
with HIPAA, to electronically  organize,  store and retrieve medical records and
medical  images.  Although the formal decision to discontinue the operations was
made subsequent to December 31, 2003, the Company's financial statements for the
year ended December 31, 2003 reflect a discontinued  operations  segment related
to the abandonment of the exploitation of the Med Wireless and PRLS technologies
after a charge to  impairment in an amount equal to the remaining net book value
of the  acquired  technology.  See  Note 3 to Notes  to  Consolidated  Financial
Statements.                                                                     

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         Based on the rapid increase in the number of well-capitalized companies
offering competing  technologies,  as well as the fact that the Company has been
unable to continue funding any technology enhancements or development related to
the Med Wireless technology,  management came to believe that the technology had
lost the ability to be a viable  competing  technology in its sector and that it
was not in the  Company's  best  interest to continue to pursue the Med Wireless
technology. Moreover, management is doubtful if the Med Wireless technology will
be considered of any significant value to a prospective buyer or licensee of the
technology.  The Company is attempting to sell this  technology,  but expects to
realize only nominal net proceeds, if any, for the technology.                  

         In addition,  the Company has abandoned its efforts to market a variety
of products and services to the sports  industry  with an emphasis on health and
technology  related  products,  primarily  PRLS.  The Company  has entered  into
discussions  for the  sale of the  Company's  majority-owned  subsidiary,  NuWay
Sports,  which was  established to market the PRLS  technology.  The Company has
entered into  discussions  for the sale of NuWay Sports to a party  unrelated to
the Company or, to its knowledge,  to Mark Roy Anderson.  If these  negotiations
result in a consummated transaction,  the Company believes it is not likely that
the Company  would receive any up-front  cash  payments.  See Note 3 to Notes to
Consolidated Financial Statements.                                              

         The Company is presently  focused on maintaining  the corporate  entity
and seeking new business  opportunities.  The Company will need working  capital
resources to maintain the Company's status and to fund other  anticipated  costs
and expenses during the year ending December 31, 2004 and beyond.  The Company's
ability to continue as a going concern is dependent on the Company's  ability to
raise capital to, at a minimum, meet its corporate maintenance requirements.  If
the Company is able to acquire an ongoing  business and/or  technology that must
be exploited, it would need additional capital until and unless that prospective
operation is able to generate  positive  working capital  sufficient to fund the
Company's cash flow requirements form operations.                               

         As a result of the dramatic  change in direction of the Company's scope
and focus, and the discontinuation of its operating businesses in 2002 and 2003,
comparisons of year-to-year results of operations are not meaningful.           

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ANALYSIS OF FINANCIAL CONDITION                                                 

       During 2003, the Company recorded an impairment charge related to its
tangible and intangible assets. The Company earned no revenues and generated no 
cash from continuing operations.                                                

Cash and Cash Equivalents                                                       

      Cash and Cash  Equivalents  increased from $521 as of December 31, 2002 to
$671 at December 31, 2003.  During the period from September 1, 2003 to current,
the Company's  President,  Mr. Calvert, has incurred  approximately  $140,000 in
costs on behalf of the Company to sustain bare minimum operations.  Cash on hand
as of October 1, 2004 was $735.  The Company  recently  received  cash  totaling
$80,000 from the sale of its common and preferred  shares which has been used to
pay for legal and  accounting  costs  associated  with the Company's  regulatory
reporting requirements.                                                         

Furniture, Fixtures and Office Equipment                                        

       Furniture, Fixtures and Office Equipment decreased from $28,844 as of
December 31, 2002 to $0 at December 31, 2003. The decrease was due to normal    
depreciation totaling $8,552. In addition, on April 1, 2004 the Company closed  
its offices and has in storage its Furniture, Fixtures and Office Equipment. As 
these items are idle and there is no foreseeable plan of use, management        
recorded a write down of the remaining net book value totaling $20,292 as of    
December 31, 2003.                                                              

Other Assets                                                                    

Marketing Database                                                              

        The marketing database decreased from $255,000 as of December 31, 2002
to $0 at December 31, 2003. The decrease is due to normal amortization totaling 
$38,250 and the remaining was due to an impairment charge totaling $216,750.    
Management had no success in its marketing efforts and its future use was       
uncertain and at that time it had not used the marketing database to market any 
product or generate any revenue for the Company.                                

Med Wireless License                                                            

       The Med Wireless License decreased from $4,090,000 as of December 31,
2002 to $0 at December 31, 2003. The decrease was due to normal amortization    
totaling $613,500 and the remaining was due to an impairment charge             
totaling $3,476,500. During 2003, primarily as a result of its inability to     
secure financing, Nuway was unable to effectively market the product            
successfully.                                                                   

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Liabilities                                                                     

    Total Current Liabilities increased $522,765 from $2,401,579 as of
December 31, 2002 to $2,924,344, as of December 31, 2003. The increase is due to
(i) an increase of Notes Payable of $470,000 reflecting a loan obtained from the
Augustine Fund totaling $420,000 and the remainder of $50,000 obtained from an  
advisory board member; (ii) an increase of Accounts Payable and Accrued Expenses
of $115,000 related to operating expenses incurred but not paid; offset by (iii)
a decrease in Debenture Payable of $25,000 arising from the conversion of       
debenture holders of the debentures into equity and (iv) the discount assigned  
to the value of the warrants that were attached to the Augustine Fund term loan.

Stockholder's Deficit                                                           

     Total Stockholders' Deficit increased by $4,896,459 during the year
ending December 31, 2003. The primary reason for the increase is that net loss  
totaled $7,622,209. This was offset by the issuance of shares of our common     
stock for salary and to compensate consultants to our Company, which increased  
Additional Paid in Capital by $2,712,882.                                       

RESULTS OF OPERATIONS - COMPARISON OF THE YEARS ENDED DECEMBER 31, 2003 AND 2002

Revenue                                                                         

       The Company had no revenues from continuing operations during 2003 or
2002. During the last half of 2002, the Company shifted its focus toward the    
information technology needs of the sports industry by marketing its PRLS       
platform. The Company's subsidiary, NuWay Sports, LLC, marketed this technology 
and generated $40,000 of revenue in the first quarter of 2003. This entity is   
held for sale; consequently the results of operations related to this subsidiary
have been reclassified in our consolidated Statement of Operations as a Loss    
from discontinued operations.                                                   

Selling, General and Administration Expense                                     

      Selling, and General and Administration expenses were $2,339,264 for
the year ending December 31, 2003, as compared to $2,157,289 for the year ending
December 31, 2002, or a net increase of 8.4%.                                   

The largest components of these expenses were:                                  

        a. Salaries and Payroll-related Expenses: These expenses were $329,622
in 2002 versus $322,532 in the current year 2003, a decrease of $7,090 or 2     
percent. At the end of 2003, the Company employed 2 full time employees, while  
at December 31, 2002 NuWay employed three (3) full-time employees. The Company's

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only two employees have employment agreements calling for the payment in the    
aggregate of $24,900 per month. Both employees have accrued unpaid compensation 
totaling $38,300 as of December 31, 2003.                                       

        b. Consulting Expense grew in 2003 from $950,532 in 2002 to $1,108,382
in 2003, an increase of 17 percent. This increase is directly related to        
management's strategy of using consultants on a project-by-project basis. These 
projects included marketing, technological development and administration and   
were primarily staffed by independent contractors who were compensated with     
Company common stock.                                                           

    c. Rent expense decreased from $96,560 in 2002 to $70,200 in 2003.
Currently the Company receives rent at no cost from a shareholder.              

         d. Legal Expenses increased from $302,088 in 2002, to $694,151 in 2003,
an increase of 130 percent. This change is due to the legal assistance required 
in 2003 for transactions and or activities such as the maintenance of reporting 
requirements, NASDAQ qualifications panel hearing for continued listing, the    
need for stock issuances used in lieu of cash to acquire services, as well as   
review of proposed acquisitions during 2003.                                    

Expenses Associated With Stock Issued for Services                              

      During 2003 the Company issued 19,248,759 shares to approximately 20
consultants, directors, and employees. Of this total 17,327,753 have been       
registered under a stock compensation plan as filed on Form S-8, while the      
balance, 1,921,006 shares were unregistered and are restricted in trading. Of   
the total issued in 2003, 2,633,590 relate to services performed in 2002 and    
16,519,169 relate to 2003. The expenses related to the shares issued for 2002   
services in 2003 were recorded in the Company's financial statements for the    
year ending December 31, 2002. In 2003 there was $1,554,700 of expenses recorded
related to the issuance of these shares. Of this amount $1,045,600 related to   
consulting services, $394,000 related to legal services $63,000 related to      
Advisory and Board of Directors expense, $52,100 related to salary expense and  
$25,000 to reduce the outstanding debentures.                                   

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Discontinued Operations                                                         

   As discussed above and in the notes to our consolidated financial
statements, we disposed of all operating entities and discontinued all          
operations. The Company recorded a loss from operations for 2003 of $2,712,940, 
as compared to a Net Loss from Continuing Operations for the year ended December
31, 2002 of $1,488,680, for a net increase in loss from operations of 82% from  
December 31, 2002 to December 31, 2003.                                         

Net Loss                                                                        

       Net Loss for the year ended December 31, 2003 was $7,622,209 or $0.25
per share compared to a $4,937,097 loss or $.50 per share for the year 2002, for
a net increase of 154% from years 2002 to 2003.                                 

RESULTS OF OPERATIONS - COMPARISON OF THE YEARS ENDED DECEMBER 31, 2002 AND 2001

Revenues                                                                        

    During 2001, total revenues (from continuing operations only) were
$3,600, representing rental income earned by the Company. The Company had no    
revenues during from continuing operations 2002 as it was engaged in the        
development of new medical technology products. During the last half of 2002,   
the Company shifted its focus toward the information technology needs of the    
sports industry relating to player health. This change in focus led to the rapid
development of the PRLS system, which began to generate revenues in the first   
quarter of 2003. Consequently, the results of our prior business line operations
in gaming machine rental, oil and gas development and distribution of cigars    
were reclassified in our consolidated statements of operations as "discontinued 
operations."                                                                    

Selling, General and Administration Expense                                     

       Selling, general and administrative expenses declined in 2002 by 17 %
to $2,157,289 from $2,600,371 in 2001. Salaries and payroll-related expenses    
were $329,622 in 2002 versus $576,041 in the prior year, a decrease of $246,419 
or 43 %. This is consistent with the reduction in employment experienced by the 
Company after its change in business focus and the divestiture of all operations
other than the new medical technology business. At the end of 2002, the Company 
employed 3 full time employees, while at December 31, 2001 the Company employed 
32 full-time employees. The principal reason for the decline in headcount from  
year to year is the change in business focus and the divestiture of non-medical 
operations during 2002.                                                         

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 Consulting expense grew significantly in 2002, to $950,532 from
$250,628 in 2001, an increase of 280 %. This increase is directly related to new
management's strategy of maintaining a very low permanent staffing level and    
supplementing that with consultants on a project-by-project basis. Further, the 
development of new products and technology related to the Company's shift in    
business focus required additional staff in the areas of applications           
development, sales, marketing and administration. These positions were primarily
staffed by independent contractors who were compensated with shares of the      
Company's common stock.                                                         

    Rent expense decreased by 50 % from $192,543 in 2001 to $96,560 in
2002. This decrease is consistent with the reduced staffing levels as well as   
limited requirement for warehouse space.                                        

   Legal expenses grew from $108,474 in 2001 to $302,088 in 2002, an
increase of 178 %. This growth is due to the high level of legal assistance     
required in 2002 for transactions such as (i) the acquisitions of the marketing 
database from Genesis and the Med Wireless technology license, (ii) financing   
completed with Camden Holdings, (iii) a major shift in the Company's core       
business strategy, (iv) a thorough change in management and (v) the need for    
stock issuances used in lieu of cash to acquire services.                       

         Travel and entertainment expense declined by 82 % in 2002 from $500,045
in 2001 to $90,293 in 2002. This decrease is due to a conscious effort on the   
part of new management to minimize these expenses as well as a reduced need for 
travel due to the divestiture of operations that were remotely located in places
like Latin and South America and Canada.                                        

Expenses Associated With Stock Issued for Services                              

         Expenses associated with stock issued for services grew by 144% in 2002
over 2001, from $405,650 to $987,944. The primary reason for this increase was  
that the Company's limited cash position in 2002 caused management to seek other
means of compensating employees and contractors for services performed. The     
expenses recorded in 2002 related to payment for legal, consulting and other    
services. The fact that the Company was focused on making the transition to a   
medical technology business meant that no cash was being received while the     
transition was occurring. Of the approximately $988,000 in expenses in 2002,    
approximately $500,000 was for legal services, $474,000 was for consultants in  
several different fields, and $14,000 related to payment of office rent.        

Discontinued Operations                                                         

   As discussed above and in the notes to our consolidated financial
statements, we disposed of several operations through the sale of two foreign   
subsidiaries, Latin American Casinos and NuWay Resources effective October 1,   

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2002, and the cessation of the operations of our World's Best Rated Cigar       
Company subsidiary in November 2002. Due to the discontinuance of these         
operations, we have reclassified the historical operating results from these    
ventures for 2001 and the nine months ended September 30, 2002 and disclosed    
such below the results from our continuing operations in our consolidated       
statements of operations. These businesses generated losses from operations of  
$3,910,193 for the year ended December 31, 2001 and $600,986 through the nine   
months ended September 30, 2002. We also recorded a loss on sale and disposal of
the net assets of these businesses of $2,847,431 in the fourth quarter of the   
year ended December 31, 2002.                                                   

Net Loss                                                                        

       Net loss for the year ended December 31, 2002 was $4,937,097 or $0.50
per share, compared to a $6,652,433 loss or $1.56 per share for the year 2001.  

Recent Accounting Pronouncements                                                

        In July 2002, the FASB issued Statement No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities." Statement No. 146 requires        
companies to recognize costs associated with the exit or disposal of activities 
as they are incurred rather than at the date a plan of disposal or commitment to
exit is initiated. Types of costs covered by Statement No. 146 include lease    
termination costs and certain employee severance costs that are associated with 
a restructuring, discontinued operation, facility closing, or other exit or     
disposal activity. Statement No. 146 will apply to all exit or disposal         
activities initiated after December 31, 2002. At this time, the Company does not
expect the adoption of the provisions of Statement No. 146 to have a material   
impact on the Company's financial results.                                      

       In November 2002, the FASB issued Interpretation No. (Interpretation)
45, "Guarantor's Accounting and Disclosure Requirements for Guarantees,         
Including Indirect Guarantees of Indebtedness of Others." Interpretation 45     
requires certain guarantees to be recorded at fair value. In general,           
Interpretation 45 applies to contracts or indemnification agreements that       
contingently require the guarantor to make payments to the guaranteed party     
based on changes in an underlying that is related to an asset, liability, or an 
equity security of the guaranteed party. The initial recognition and measurement
provisions of Interpretation 45 are applicable on a prospective basis to        
guarantees issued or modified after December 31, 2002. Interpretation 45 also   
requires new disclosures, even when the likelihood of making any payments under 
the guarantee is remote. These disclosure requirements are effective for        
financial statements of interim or annual periods ending after December 15,     
2002. The changes required by Interpretation 45 are not expected to have a      
material impact on the results of operations, financial position or liquidity of
the Company.                                                                    

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LIQUIDITY AND CAPITAL RESOURCES                                                 

         Cash and cash equivalents increased from $521 last year 2002 to $671 at
December 31, 2003. We had nominal revenues in 2003 and were forced to consume   
cash on hand to fund its new operations. Due to our limited liquid resources,   
and lack of revenues or any viable means of generating income from operations,  
our auditors have included an explanatory paragraph in this report which        
expresses substantial doubt about our ability to continue as a going concern.   

     The Company will be required to raise additional capital to sustain
operations for the next twelve months and is actively seeking investments from  
third parties. There is no assurance that the Company will be able to raise     
additional capital. It is unlikely that the Company will be able to qualify for 
bank debt until such time as the Company is able to demonstrate the financial   
strength to provide confidence for a lender.                                    

         The Company has relied upon its award plans, the 2002 Consultant Equity
Plan, the 2003 Stock Compensation Plan and the Nuway Medical, Inc. 2004 Equity  
Plan, to compensate consultants and employees who have assisted in developing   
and executing the Company's business plan. The Company has significantly relied 
on these plans to compensate various consultants and personnel, and this        
reliance has significantly diluted the loss per share. During 2004, these       
issuances have been of questionable benefit in compensating consultants and     
employees, as there is little market interest for the Company's stock.          

    The Company's consolidated financial statements have been prepared
assuming the Company will continue as a going concern, which contemplates the   
realization of assets and satisfaction of liabilities in the normal course of   
business. During 2003 and as of September 30, 2004, the Company has limited     
liquid and capital resources and management is incurring personal losses while  
seeking acquisition opportunities.                                              

     Ultimately, the Company's ability to continue as a going concern is
dependent upon its ability to attract new sources of capital, establish an      
acquisition or reverse merger candidate with continuing operations, attain a    
reasonable threshold of operating efficiencies and achieve profitable           
operations.                                                                     

     At December 31, 2003, the Company had no debt obligations requiring
future cash commitments other than as follows: Significant debts at December 31,
2003 included: (i) $420,000 (plus interest) due to Augustine II, LLC (see       
immediately below); (ii) $125,000 of convertible debentures, which were further 
reduced to $30,000 March 11, 2004, through the issuance of shares of common     
stock of the Company, (Note 15), (iii) a loan due to a former advisory board    
member equal to $65,000, subsequently reduced to $35,000 in March 2004, and (iv)
a $1,120,000 note payable which was purchased in March of 2003 by New Millennium

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Capital Partners, LLC, an entity owned and controlled by the Company's president
and his family, plus accrued but unpaid interest. The Company intends to convert
this note payable to equity in the future, upon certain conditions of the       
Company, namely the availability of shares within the limits of the Company     
Charter, and upon approval of the Board of Directors of the Company and New     
Millennium, which has agreed in principal, subject to appropriate regulatory    
compliance and approvals as may be required.                                    

Augustine II, LLC Note                                                          

        On June 10, 2003 the Company entered into a Term Loan Agreement ("Loan
Agreement") with the Augustine Fund, pursuant to which the Augustine Fund agreed
to lend the Company $420,000, payable in installments of $250,000, $100,000, and
$70,000 (the "Loan"). The Company has received all scheduled installments, and  
principal and interest (at an annual rate of 10%) was originally due in full on 
February 29, 2004.                                                              

        The Loan Agreement is subject to certain requirements that the Company
make mandatory prepayments of the Loan from the proceeds of any asset sales     
outside of the ordinary course of business, and, on a quarterly basis, from     
positive cash flow. In addition, all or any portion of the Loan may be prepaid  
by the Company may prepay all or any portion of the Loan at any time without    
premium or penalty. The proceeds of the Loan were used by the Company for       
working capital.                                                                

     As additional consideration for making the Loan, the Augustine Fund
received five-year warrants to purchase up to 6,158,381 shares of the Company's 
common stock at an exercise price of $0.16 per share. The Company can require   
that the warrants be exercised if the Company's shares of common stock trade at 
or above $0.60 per share for each trading day within the 30 calendar days prior 
to the maturity date of the Loan, trading volume of the shares equals or exceeds
100,000 shares per day during such period, and the shares of the Company's      
common stock underlying the warrants have been included in a registration       
statement filed with and declared effective by the SEC prior to the maturity    
date. If these conditions are not fully satisfied by the maturity date (which   
they were not), then the Augustine Fund may, at any time following the maturity 
date and so long as the warrants remain exercisable, elect to exercise all or   
any portion of the warrants pursuant to a "cashless exercise" provisions to     
"cashless exercise" provisions of the warrants.                                 

  As security for the Loan, New Millennium, an affiliate of Dennis
Calvert, pledged 2.5 million shares of the Company's common stock owned by New  
Millennium, and the Company has granted the Augustine Fund a security interest  
in its 51% membership ownership interest in NuWay Sports. As a result, the      
Company will need to consent of the Augustine Fund to release its security      
interest in NuWay Sports if the Company is able to sell NuWay Sports.           

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         Prior to the original maturity date of the Loan, the Company spoke with
representatives of Augustine and advised them that the Company was unable to pay
the amount due under the Loan by the February 29, 2004 maturity date. Augustine 
agreed to extend the maturity date of the Loan Agreement to August 2004. In     
addition to the extension of the maturity date, Augustine was given to have the 
option of having the Loan satisfied in cash or by the conversion of any         
remaining principal balance and any accrued interest on the Loan to shares of   
the Company's common stock at a 15% discount to market, so long as Augustine's  
holdings do not exceed 4.9% of the total issued and outstanding shares of the   
Company's common stock at any time. In addition, the warrants held by Augustine 
to purchase 6,158,381 shares of the Company's common stock were re-priced to an 
exercise price of $.035 per share. Exercise of the warrants is also subject to  
the limit that Augustine does not hold more than 4.9% of the issued and         
outstanding shares of the Company's common stock. The Company recorded $344,832 
of interest expense as of December 31, 2003, of which $23,210 is applied to the 
Augustine Note.                                                                 

Since that time, the Company and Augustine have entered into  
negotiations to further extend the maturity date of the Loan and those          
negotiations are currently being finalized and the new terms documented. While  
the precise terms have not been finalized and are subject to change, the Company
believes that the loan will be extended an additional six months.               

Other Items                                                                     

      During 2003, the Company  raised  $279,661 with the sale of 559,322 of its
Preferred Shares,  obtained $420,000 from a term loan and $50,000 from a loan by
an advisory  board member.  During the later part of 2003 and through 2004,  the
Company's  President  incurred  costs on its behalf,  which total  approximately
$140,000.  During 2004 the Company has obtained  $30,000 from the sale 5,250,000
shares of common  stock and  $50,000  from a loan that  entitles  the  holder to
convert the loan into  10,000,000  shares of its Series A Preferred  Stock.  The
Company has  approximately  $1,000 cash on hand,  which is  insufficient to meet
operating expenses for any extended period. Management believes that the Company
will be required to raise additional  capital to sustain operations for the next
twelve months and is actively seeking  investments through private investors and
investment bankers. There is no assurance that the Company will be able to raise
additional  capital. It is unlikely that the Company will be able to qualify for
bank debt until such time as the Company is able to  demonstrate  the  financial
strength to provide confidence for a lender.                                    

         Also during 2003, the Company issued 19,248,759 shares to approximately
37 consultants, directors, and employees. Of this total, 17,327,753 shares have 
been registered with the SEC, while the balance and 1,921,006 shares, were not  
so registered and are "restricted" securities. Of the total number of shares    
issued in 2003, 2,633,590 shares relate to services performed in 2002 and       

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16,519,169 shares relate to 2003. The expenses related to the shares issued for 
2002 services in 2003 were recorded in the Company's financial statements for   
the year ending December 31, 2002. In 2003, there was $1,554,700 of expenses    
recorded related to the issuance of these shares. Of this amount $1,045,600     
related to consulting services, $394,000 related to legal services $63,000      
related to Advisory and Board of Directors expense, $52,100 related to salary   
expense and $25,000 to reduce the outstanding debentures.                       

EFFECTS OF TRANSACTIONS WITH RELATED PARTIES                                    

DUE TO PRESIDENT                                                                

        In conjunction with the acquisition of the technology license from Med
Wireless, Inc. on August 21, 2002, the Company assumed a $1,120,000 note with   
interest at 10% per annum payable by Med Wireless to Summitt Ventures, Inc., a  
company controlled by Mark Anderson (Anderson). The note is secured by the      
Company's assets and was originally due on June 15, 2003. On March 26, 2003,    
Summitt Ventures sold the note, together with 4,182,107 shares of the Company's 
common stock, to New Millennium Capital Partners LLC ("New Millennium"), a      
limited liability company controlled and owned by the Company's president and   
family, in exchange for a $900,000 promissory note issued by New Millennium in  
favor of Summitt Ventures. This note is secured by all of the stock of the      
Company owned by New Millennium and Mr. Calvert. On March 26, 2003, the         
Company's board of directors voted to convert the $1,120,000 note held by New   
Millennium into 22,400,000 shares of restricted common stock of the Company (at 
a conversion price discounted 37.5% to the then market price of $0.08). New     
Millennium agreed to this conversion. Subsequent to the vote by the board to    
convert the note, the Company received notification from Nasdaq's Listing       
Qualifications Department that converting the note without shareholder approval 
violated certain Nasdaq Marketplace Rules. In response to this notification, the
board, with the concurrence of New Millennium, voted to amend its resolution and
withhold issuance of the shares to New Millennium until the Company's           
shareholders approved the conversion. This shareholder vote has not taken place 
and the shares have not been issued to New Millennium.                          

  New Millennium Capital Partners, LLC, a Nevada limited liability
company owned and controlled by the Company's president and his family as an    
investment vehicle was formed in 1999. No individual, entity or party (s)       
associated with the Company's business has ever had any ownership interest in   
New Millennium and it is an independent company. Mark Anderson, a principal of  
those companies that sold and/or licensed certain technologies to the Company,  
conditioned the purchase by New Millennium on the Company converting the        
promissory note to common stock. The conversion of the note held by New         
Millennium is a matter to be brought before the NuWay shareholders at its next  
available shareholders meeting.                                                 

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        The business purpose of the original decision to convert the note into
equity was to retire $1,120,000 in debt owed by the Company thereby increasing  
shareholder equity by that amount and avoiding a default on the note and the    
insolvency and possible liquidation of the Company. In arriving at a conversion 
price, the board of directors determined that a 37.5% discount to market price  
was appropriate based on a number of factors, including that (i) with the       
quantity of the shares that would be issued, a block of shares that size could  
not be liquidated without affecting the market price of the shares, and (ii) the
shares would be "restricted shares" and could therefore not be sold by New      
Millennium in the public markets prior to two years from the date of the        
conversion, and thereafter would be subject to the volume and manner of sale    
limitations of Rule 144 under the Securities Act of 1933.                       

      To allow time for a shareholder vote with respect to the conversion,
New Millennium agreed to extend the terms of the note, from June 15, 2003 to    
October 1, 2003.                                                                

        At the Company's June 6, 2003 board meeting, Mr. Calvert, on behalf of
New Millennium, and the Company, through the unanimous action of the Board (with
Mr. Calvert abstaining), agreed that, in light of current market conditions     
(namely the significant increase in the trading price of the Company's common   
stock since March 26, 2003, the date on which the conversion of the note to     
equity was originally approved by the Board, from $0.08 to $0.28 as of June 6,  
2003), it would be inequitable for New Millennium to convert the note at the    
originally agreed to $0.05 per share price. In this regard, Mr. Calvert, on     
behalf of New Millennium, and the Company orally agreed to rescind the agreement
to convert the note. In addition, New Millennium orally agreed with the Company 
to extend the maturity date of the note to a first payment due October 1, 2003  
in the amount of $100,000 and the balance of the principal due on April 1, 2004,
with interest due according to the original terms of the note (to correspond to 
the payment terms of the note made by New Millennium in favor of Summitt), and  
furthermore to reduce the Company's obligation on the note to the extent that   
New Millennium is able to reduce its obligation on its note with Summitt        
Ventures. While the prior holder of the note, Summitt Ventures, purported to    
condition New Millennium's purchase on the conversion of the note, Mr. Calvert  
has represented to the Company that due to Mr. Anderson's actions (as previously
described by the Company in its Form 10-QSB for the quarter ended March 31,     
2003), Mr. Calvert now believes that conversion of the note is no longer a      
required term of the agreement between New Millennium and Summitt.              

      The Company was unable to pay the note at the due date of October 1,
2003. At the board meeting on October 15, 2003, the board determined to put the 
issue of conversion of the note to the Company's shareholders at a special      
meeting of the shareholders scheduled for December 9, 2003. On November 7, 2003,
a Definitive 14a was filed by the Company with respect to that meeting. The     
shareholders meeting was held on December 9, 2003, but adjourned without a vote,

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as there weren't enough shareholders present to hold a vote. The meeting was    
rescheduled for December 30, 2003. At the December 30, 2003 shareholder meeting,
the board was again advised that there was not a quorum, and therefore the vote 
could not be held. Because this was the second attempt to obtain a quorum, and  
more than 4,000,000 additional shares were required to be voted to obtain a     
quorum, the board voted to adjourn the meeting indefinitely. As of January 1,   
2004, the loan is in default status and has not been repaid together with       
$114,800 in accrued but unpaid interest. The amounts due Anderson by New        
Millennium are also in default.                                                 

     Technically, under the terms of the New Millennium Agreement, it is
possible that Anderson has the right to reacquire the shares of the Company's   
common stock that were sold to New Millennium, if New Millennium defaults on the
promissory note issued by New Millennium to Camden Holdings to purchase the     
shares. The New Millennium Note is purportedly secured by the purchased shares  
of the Company's common stock; however, New Millennium and Mr. Calvert believe  
that Anderson have not perfected their security interest in those shares.       
Moreover, the Augustine Fund is the pledgee of 2,500,000 of these shares and    
holds those shares as pledgee.                                                  

       New Millennium has informed the Board of Directors that its intent is
to fully convert the Note to stock as soon as is practical in light of the      
Company circumstances as they may change in the future to accommodate the       
conversion in light of the circumstances at that time.                          

ABANDONED ACQUISITION                                                           

On January 31, 2004, the Company entered into a Stock Purchase
Agreement (the "Stock Purchase Agreement") with Premium Medical Group, Inc., a  
Florida corporation ("PMG") and PMG's sole stockholders, Eduardo A. Ruiz and    
Luis A. Ruiz (the "PMG Stockholders"). Prior to this transaction, there was no  
business or other relationship between the Company and its affiliates and PMG or
the PMG Stockholders.                                                           

         Pursuant to the Stock Purchase Agreement, the Company agreed to acquire
100% of the shares of PMG from the PMG Stockholders in exchange for 30,000,000  
shares of the Company's common stock, subject to certain adjustments. The exact 
number of Company Shares to be issued to the PMG Stockholders was subject to    
adjustment in the event certain revenue was or was not generated by PMG during  
one year following the closing of the transaction. PMG had been organized in    
June 2003 to provide medical products to hospitals and medical clinics in South 
America, primarily Venezuela. Luis A. Ruiz became a director of the Company in  
connection with the transaction.                                                

     The parties had a difference in expectations regarding who would be
ultimately responsible for paying for the audit of PMG that was required in     

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order for the Company to complete its disclosure obligations under the          
Securities Exchange Act. Additionally, the Company did not have a sufficient    
number of authorized and unissued shares of its common stock to both satisfy its
obligations to the PMG Stockholders and to issue shares of common stock in a    
meaningful financing transaction, given the low price per share at which the    
Company's common stock trades. The Company lacked the financial resources to    
schedule a stockholders' meeting, prepare a proxy statement and solicit proxies 
for the purpose of amending its Certificate of Incorporation to increase its    
authorized capital stock.                                                       

   As a result of these and other factors, the Company and PMG never
consolidated their operations, the Company never exercised control over PMG or  
its operations and the parties never exchanged stock certificates evidencing    
their ownership in each other.                                                  

        Therefore, the parties entered into discussions and concluded amicably
that it was in the mutual best interest of the respective companies and their   
respective stockholders, to rescind the transactions provided for in the Stock  
Purchase Agreement and return all parties to their respective positions prior to
the transactions contemplated in the Stock Purchase Agreement.                  

     The parties entered into a Rescission Agreement on October 14, 2004
that provides, in relevant part, that (i) all transactions contemplated by the  
Stock Purchase Agreement shall be rescinded as if the Stock Purchase Agreement  
had never been executed and delivered; (ii) the parties forever waive all rights
to receive stock in PMG and the Company, as the case may be; (iii) Luis A. Ruiz 
shall resign as a director of the Company; and (iv) the Company and PMG shall   
file appropriate documents with the Secretary of State of the State of Florida  
with respect to the rescission of the exchange of shares provided for in the    
Stock Purchase Agreement.                                                       

CRITICAL ACCOUNTING POLICIES                                                    

The Securities and Exchange Commission ("SEC") recently issued
Financial Reporting release No. 60, "Cautionary Advice Regarding Disclosure     
About Critical Accounting Policies" (FRR 60"), suggesting companies provide     
additional disclosure and commentary on their most critical accounting policies.
In FRR 60, the SEC defined the most critical accounting policies as the ones    
that are most important to the portrayal of a company's financial condition and 
operating results, and require management to make its most difficult and        
subjective judgments, often as a result of the need to make estimates of matters
that are inherently uncertain. Based on this definition, the Company's most     
critical accounting policies include: non-cash transactions and compensation    
valuations that affect the total expenses reported in the current period and/or 
values of assets received in exchange.                                          

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     The Company has established a policy relative to the methodology to
determine the value assigned to each intangible acquired with or licensed by the
Company and/or services or products received for non-cash consideration of the  
Company's common stock. The value is based on the market price of the Company's 
common stock issued as consideration, at the date of the agreement of each      
transaction or when the service is rendered or product is received, as adjusted 
for applicable discounts.                                                       

         The methods, estimates and judgments the Company uses in applying these
most critical accounting policies have a significant impact on the results of   
the Company reports in its financial statements.                                

ITEM 7. FINANCIAL STATEMENTS.                                                   

     Our consolidated financial statements as of and for the years ended
December 31, 2003 and 2002 are presented in a separate section of this report   
following Item 14 and begin with the index on page F-1.                         

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND         
FINANCIAL DISCLOSURE.                                                           

        As disclosed in our Current Report on Form 8-K filed on April 7, 2003,
as amended on April 10, 2003, we dismissed Shubitz Rosenbloom & Co., PA         
("Shubitz") as our principal accounting firm as of March 31, 2003 and we engaged
Haskell & White LLP ("H&W") as our principal accounting firm. H&W was engaged to
audit our consolidated financial statements for the year ended December 31,     
2002. The decision to change auditors was approved by our board of directors.   

         In connection with the audits of the two years ended December 31, 2001,
and during the subsequent period through March 31, 2003, there were no          
disagreements with Shubitz on any matter of accounting principles or practices, 
financial statement disclosure or auditing scope or procedures, which           
disagreements, if not resolved to the satisfaction of Shubitz, would have caused
them to make reference to the subject matter of the disagreement in connection  
with its opinion.                                                               

       As disclosed in our Current Report on Form 8-K filed on September 10,
2004, as amended on September 17, 2003, we dismissed H&W as our principal       
accounting firm as of September 9, 2004. As disclosed in our Current Report on  
Form 8-K filed on September 16, 2004, we engaged Jeffrey S. Gilbert, CPA        
("Gilbert") as our principal accountant. Gilbert was engaged to audit our       
consolidated financial statements for the year ended December 31, 2003. The     
decision to change auditors was recommended by our audit committee and approved 
by our board of directors.                                                      

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 During the Company's relationship with H&W, since H&W's initial
engagement as the principal auditors on March 31, 2003, through September 9,    
2004, there were no disagreements with H&W, whether or not resolved, on any     
matter of accounting principles or practices, financial statement disclosure, or
auditing scope or procedure, which, if not resolved to H&W's satisfaction, would
have caused it to make reference to the subject matter of the disagreement(s) in
connection with its report on the consolidated financial statements for the year
ended December 31, 2002.                                                        

ITEM 8A. CONTROLS AND PROCEDURES                                                

      (a) Evaluation of disclosure controls and procedures. Our management
evaluated, with the participation of Dennis Calvert, who serves as both our     
Chief Executive Officer and Chief Financial Officer, the effectiveness of our   
disclosure controls and procedures as of the end of the period covered by this  
Annual Report on Form 10-KSB. Based on this evaluation, our Chief Executive     
Officer and Chief Financial Officer have concluded that our disclosure controls 
and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934) are effective to ensure that information required to be   
disclosed by us in reports that we file or submit under the Exchange Act is     
recorded, processed, summarized and reported within the time periods specified  
in Securities and Exchange Commission rules and forms. It should be noted that  
the design of any system of controls is based in part upon certain assumptions  
about the likelihood of future events, and there can be no assurance that any   
design will succeed in achieving its stated goals under all potential future    
conditions, regardless of how remote.                                           

        (b) Changes in internal control over financial reporting. There was no
change in our internal control over financial reporting that occurred during the
period covered by this Annual Report on Form 10-KSB that has materially         
affected, or is reasonably likely to materially affect, our internal control    
over financial reporting.                                                       

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PART III                                                                        

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS AND COMPLIANCE WITH SECTION 16(A) OF THE  
EXCHANGE ACT.                                                                   

DIRECTORS AND EXECUTIVE OFFICERS.                             

        The following table sets forth information regarding our directors and
the nominees as of September 30, 2004:                                          

            NAME                  AGE         POSITION            DIRECTOR SINCE
----------------------------      ---     ----------------------  --------------
Dennis Calvert                            President, Chief                      
                              41     Executive Officer and        2002
                         Chairman of the Board
Joseph Provenzano                  34     Financial                    2002     
                          Officer, Treasurer and
            Director
Steven V. Harrison II (1)(2)       44     Director                     2003     
Gary Cox (1)(2)                    43     Director                     2003     

(1)  Member of the Audit Committee.                                             

(2)  Member of the Compensation Committee.                                      

There are no family relationships between any director and any
executive officer of the Company.                                               

       DENNIS CALVERT is our President, Chief Executive Officer, Chairman of
the Board, and Interim Chief Financial Officer. Dennis Calvert was appointed a  
director in June 2002, and has served as President and Chief Executive Officer  
since June 2002, Corporate Secretary from September 2002 until March 2003, and  
Interim Chief Financial Officer since March 2003. Mr. Calvert holds a BA degree 
in Economics from Wake Forest University, where he was a varsity basketball     
player on full scholarship. Mr. Calvert also studied at Columbia University and 
Harding University. He was an honor student in high school with numerous        
leadership awards. He is also an Eagle Scout.                                   

         Mr. Calvert has an extensive entrepreneurial background as an operator,
investor and consultant. From June 2002 to September 2002 he served as president
of Med Wireless, Inc. In 1998 he was a founder, president and board member of   
Utelecom Communications, Inc. where he led the acquisition of four companies and
secured a line of credit for $7.5 million. He remains an owner and board member 
of that firm. He was an investor and served as a manager of Beep for Free.com,  
LLC beginning in the year 2000, a consumer products and technology related      

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company. Mr. Calvert resigned as the manager of Beep For Free.com, LLC in June  
2002 and the company ceased operations in December 2002. Mr. Calvert was a      
founder and chairman of ZZYZX Technologies, Inc., a company that designed and   
produced high tech equipment. ZZYZX was sold in 2001. From 1990 to 1996 Calvert 
served as head of mergers and acquisitions for Medical Asset Management, Inc., a
company that acquired and managed medical-related businesses. During his tenure 
he participated in more than 50 acquisitions and served in numerous positions   
with the Company. Prior, he was a founder and officer of a medical recruiting   
and consulting firm named Merritt Hawkins and Associates from 1987 to 1990.     
Earlier, he was a top producing sales associate for a leading physician         
recruitment firm, Jackson and Coker, Inc. and served as a sales associate for   
Diamond Shamrock, Inc. from 1985 to 1986.                                       

         JOSEPH PROVENZANO was appointed a director in June 2002 and assumed the
role of Corporate Secretary in March 2003.                                      

    Mr. Provenzano heads the Investor Relations effort and manages the
mergers and acquisitions function for NuWay. He began his corporate career in   
1988 as a Personnel Manager and Recruiter for First American Travel, a marketing
company in Southern California. He then entered into an entry-level Technician  
position within the Commercial and Residential security industry. He left the   
industry as a General Manager in the mid 1990's to apply his marketing and sales
training to the logistics industry. He was then employed by two major Southern  
California moving and storage companies as head of marketing. He formed his own 
marketing company called Pre-Move Marketing Services (PMSA), offering           
advertising and direct marketing products for the moving and storage industry,  
in 1996. He joined Camden Holdings, Inc., an investment holding company to      
manage their mergers and acquisitions department, in mid 2001, and participated 
in more than 50 corporate mergers and acquisitions. He was employed there until 
March 2003, at which time he became employed full time by the Company. Mr.      
Provenzano has participated in organized rodeo and motocross competitions.      

      STEVEN V. HARRISON II has been a director since March 2003.  Mr.  Harrison
is the president of Empact,  Inc. a consumer  products based marketing  company.
From  1997  to  2001,  he  was  the  founder,  president  and  CEO  of In  Touch
Communications,  Inc., a Competitive  Local Exchange  Carrier (CLEC),  providing
residential and business telephone services within the state of California, with
annual revenue of more than $15 million. During 2001 and 2002 he was an investor
in a number of healthcare and consumer  products based companies  including Beep
for Free.com,  LLC. Mr.  Harrison was  President of Beep for Free.com,  LLC from
June 2002 until it ceased  operations in December  2002.  From 1991 to 1997, Mr.
Harrison was Chief Executive Officer of Resource Medical Group, Inc.,  providing
management  consultancy services to the healthcare industry assisting hospitals,
Health Maintenance  Organizations,  clinics,  and practice management firms with
medical staff planning and contracting issues, feasibility studies and physician

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recruitment and retention. Mr. Harrison also played Division I football at      
Appalachian State University.                                                   

       GARY COX has been a director since May 2003. Mr. Cox has more than 10
years in the healthcare field as consultant to hospitals and medical groups. He 
started his own firm in 1995 named Resource Medical International and is still  
active in that business. He served for more than 10 years with UK firms in sales
and marketing positions prior to beginning his healthcare career. He holds a    
technical degree in engineering from Leicester University in England. He was    
also a competitive athlete and played for a number of professional soccer       
(football) clubs in England in his early career.                                

COMMITTEES OF THE BOARD OF DIRECTORS                                            

 The Board of Directors has established an Audit Committee and a
Compensation Committee.                                                         

         The Audit Committee meets with management and the Company's independent
public accountants to review the adequacy of internal controls and other        
financial reporting matters. Mr. Harrison is Chairman of the Audit committee.   
Mr. Cox also serves on the audit committee. The board of directors has not      
designated an audit committee financial expert and does not believe that either 
member of the Audit Committee would satisfy the current definitional            
requirements of SEC rules and regulations to be an audit committee financial    
expert.                                                                         

      The Compensation Committee reviews the compensation for all officers
and directors and affiliates of the Company. The Committee also administers the 
Company's stock option plan. Mr. Harrison is Chairman of the Compensation       
Committee and Mr. Cox serves on the Compensation Committee.                     

   The Board has determined that each of Messrs. Harrison and Cox is
independent as defined under NASDAQ Marketplace rules. In 2003, the staff of    
NASDAQ had questioned whether Mr. Harrison was independent, and the NASDAQ      
Qualifications Panel discussed those issues with the Company at a hearing held  
on May 16, 2003. The determination letter delivered to the Company by the NASDAQ
Qualifications Panel, which resulted in the delisting of the Company's common   
stock from the NASDAQ SmallCap Market, stated, "While the Panel acknowledged    
that it appears the Company may have regained compliance with the independent   
directors and audit committee composition requirements based on the appointment 
of Messrs. Cox and Harrison, it [the Panel] determined not to make a finding on 
these deficiencies given that the appropriate Nasdaq background checks have not 
yet been completed".                                                            

    The Company continues to believe that Mr. Harrison is independent,
because has no business dealings with the Company other than in his role as     

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board member. However, Mr. Harrison formerly was a partner of Mr. Calvert in a  
business named Beep For Free.com, LLC, from which Mr. Calvert resigned as the   
managing member in June 2002. Beep For Free.com, LLC ceased operations in       
December 2002.                                                                  

   In October 2004, the board of directors adopted a written code of
ethics that applies to its principal executive officer, principal financial     
officer, principal accounting officer or controller, or persons performing      
similar functions.                                                              

COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT                               

   Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors, certain officers and persons holding 10 % or more of the   
Company's common stock to file reports regarding their ownership and regarding  
their acquisitions and dispositions of the Company's common stock with the      
Securities and Exchange Commission. Such persons are required by SEC regulations
to furnish the Company with copies of all Section 16(a) forms they file.        

      To our knowledge, based solely upon review of Forms 3, 4, and 5 (and
amendments thereto) and written representations provided to the Company by      
executive officers, directors and stockholders beneficially owning 10 % or      
greater of the outstanding shares, the Company believes that such persons filed 
pursuant to the requirements of the Securities and Exchange Commission on a     
timely basis, other than (i) one late report filed by Mr. Calvert, (ii) two late
reports filed by Mr. Provenzano with respect to one transaction, (iii) two late 
reports filed by Mr. Harrison with respect to two transactions, (iv) two late   
reports filed by Mr. Cox with respect to one transaction and (v) two late       
reports filed by New Millennium with respect to one transaction.                

ITEM 10. EXECUTIVE COMPENSATION                                                 

  The following table sets forth the cash compensation paid by the
Company to the chief executive officer and the next four highest paid executive 
officers who received compensation in excess of $100,000 (the "Named Executive  
Officers") during 2002 and 2003:                                                

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                                                        [Enlarge/Download Table]

                              Annual Compensation                     Long-term Compensation                  
                                                                Awards                       Payouts          
                                                                      Securities                              
Name and Principal                                      Restricted    Underlying                     Other    
Position            Year      Salary      Compensation  Stock Awards  Options/SARs   TIP Payouts  Compensation
------------------  --------  -------     ------------  ------------  ------------   -----------  ------------
                                                                                                              
Dennis Calvert,                14,000                   4,000,000 (3)                                         
Chief Executive     2002 (1)   14,000                                                                         
Officer             2003                       --                          --             --           --     

Joseph Provenzano,                                      1,200,000                                             
Secretary           2003 (2)   10,800          --                          --             --           --     

---------                                                                       
(1)   Became Chief Executive Officer in June 2002.                              

(2)   Became Secretary in March 2003.                                           

(3)   Mr. Calvert was issued 1,000,000 shares on January 9, 2003, and           
subsequently returned the shares to the Company. He was also issued 
    3,000,000 shares on March 18, 2003, and subsequently returned the shares
to the Company.                                                     

EMPLOYMENT AGREEMENTS                                                           

         The Company entered into an employment agreement with Dennis Calvert in
December 2002. Mr. Calvert's employment agreement provides for him to be        
employed for five years at an annual salary of $168,000. The employment         
agreement further provides that Mr. Calvert work with the Company on a full time
basis, that the office be located in Laguna Hills, California, that he receive  
annual increases of 10% of his base income, that bonuses will be payable based  
on the greater of a performance scale established by the Compensation Committee,
assigned by the board of directors, or 3% of the annual increase in market      
capitalization value. The compensation plan includes benefits of a car          
allowance, insurance and a standard vacation package. The agreement has certain 
minimum performance standards and calls for a severance package equal to one    
year's base compensation, plus an additional one half year's compensation for   
each year of service beginning in 2003. Standard confidentiality, company       
ownership rights to property and assets and arbitration clauses are included in 
the agreement.                                                                  

         The Company entered into an employment agreement with Mr. Provenzano in
March 2003. Mr. Provenzano's employment agreement provides for him to be        
employed for five years at an annual salary of $130,800. The employment         
agreement provides that, at the Company's discretion, the Company may choose to 
pay up to $4,900 of Mr. Provenzano's monthly salary in the form of stock in lieu
of cash. Mr. Provenzano is also eligible to receive incentive bonuses, stock    
ownership participation and employee related benefits. The employment agreement 
further provides that Mr. Provenzano receive annual increases of 5% of his base 
income, that bonuses will be payable based on the greater of a performance scale
established by the Compensation Committee, assigned by the board of directors,  
or 1.5% of the annual increase in market capitalization value. The compensation 

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plan includes those benefits of car allowance and insurance benefits and a      
standard vacation package. The agreement has certain minimum performance        
standards and calls for a severance package equal to one year's base            
compensation, plus an additional one half year's compensation for each year of  
service beginning in 2003. Standard confidentiality, company ownership rights to
property and assets and arbitration clauses are included in the agreement.      

OPTIONS GRANTED DURING LAST FISCAL YEAR                                         

      No options were granted to the Named Executive Officers during 2003.

EQUITY COMPENSATION PLANS                                                       

1994 STOCK OPTION PLAN                                                          

         In June 1994, the board of directors adopted the 1994 Stock Option Plan
(the "1994 Plan"). The maximum number of shares available for issuance under the
1994 Plan is 1,500,000 shares. The 1994 Plan terminates on June 13, 2004. The   
1994 Plan is designed to provide additional incentives for directors and        
officers and other key employees of the Company, to promote the success of the  
business and to enhance the Company's ability to attract and retain the services
of qualified persons. The board of directors administers the 1994 Plan. The 1994
Plan authorizes the board of directors to grant key employees selected by it,   
incentive stock options and non-qualified stock options. The exercise price of  
shares of Common Stock subject to options qualifying as incentive stock options 
must not be less than the fair market value of the Common Stock on the date of  
the grant. The exercise price of incentive options granted under the 1994 Plan  
to any participant who owns stock equal to more than 10% of the total combined  
voting power of all classes of outstanding stock of the Company must be at least
equal to 100% of the fair market value on the date of grant. Fair market value  
has been determined to be the closing price for the Company's common stock      
reported by NASDAQ on the date of option grant.                                 

         The board of directors may amend the 1994 Plan at any time but may not,
without stockholder approval, adopt any amendment, which would materially       
increase the benefits accruing to participants, or materially modify the        
eligibility requirements. The Company also may not, without stockholder         
approval, adopt any amendment, which would increase the maximum number of       
shares, which may be issued under the 1994 Plan, unless the increase results    
from a stock dividend, stock split or other change in the capital stock of the  
Company. In March 1999, the board of directors authorized an amendment to the   
1994 Plan increasing the number of shares to be issued thereunder from 1,000,000
to 1,500,000. This amendment was submitted for stockholder approval at the 1998 
Annual Meeting and was approved.                                                

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         At December 31, 2003, no options remained outstanding and fully vested,
as follows:                                                                     

                                      Number of        Price Per
                                     Shares            Share
                                         ----------     ----------------
Options Outstanding at January 1, 2003          65,000        $1.00 - $1.75     
Options Outstanding at December 31, 2003             0        $1.00 - $1.75     
Options Expired                                (65,000)               $1.00     
                   ---------
Options Outstanding at December 31, 2003             0        $1.00 - $1.75     
                   =========

2002 CONSULTANT EQUITY PLAN                                                     

         In August 2002, the Company's board of directors approved the formation
of the 2002 Consultant Equity Plan (the "2002 Plan"), designed to allow         
consultants to be compensated with shares of Company common stock for services  
provided to the Company. A total of 1,500,000 shares under the 2002 Plan were   
registered with the SEC. The 2002 Plan was amended by the Company's board of    
directors in December 2002. A total of 3,500,000 additional shares were         
registered with the SEC on a Form S-8 registration statement on December 27,    
2002. Approval of the 2002 Plan was not submitted to the vote of the            
stockholders. Persons eligible to receive stock awards under the 2002 Plan      
included "consultants" that provide bona fide consulting services to the        
Company, excluding any services incident to the raising of capital or promotion 
or maintenance of a market for the Company's securities.                        

      The 2002 Plan expires ten years from its inception. The 2002 Plan is
administered by a plan committee of two or more members of the board of         
directors. The plan committee can award shares or options to purchase shares at 
a price in its discretion, so long as the price chosen is not less than 85% of  
the fair market value of the underlying shares as of the date of the grant.     

    From August 2002 through February 2003, the Company issued all but
84,452 of the 5,000,000 shares available under the 2002 Plan to approximately 26
consultants, employees and directors. Beginning in September 2002, Mark Roy     
Anderson served as a consultant to the Company pursuant to a written agreement  
and received 1,241,884 shares (25.3%) of the 4,915,548 shares of the Company's  
common stock that was issued under the 2002 Plan. See "Certain Relationships and
Related Transactions".                                                          

2003 STOCK COMPENSATION PLAN                                                    

      In February 2003, the Company's board of directors approved the 2003
Plan as a means of providing directors, key employees and consultants additional
incentive to provide services to the Company. Both stock options and stock      
grants may be made under the 2003 Plan. The 2003 Plan sets aside up to          
15,000,000 shares of the Company's common stock for these purposes, which shares

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were registered with the SEC on a Form S-8 registration statement on February   
27, 2003. Approval of the 2003 Plan was not submitted to a vote of the          
stockholders. The board of directors administers the 2003 Plan. The 2003 Plan   
allows the Board to award grants of shares of the Company's common stock or     
options to purchase shares of the Company's common stock. The board of directors
has discretion to set the price of the options, but in no event shall that price
be less than 100% of the fair market value of the shares at the time of the     
grant. The board of directors may at any time amend or terminate the 2003 Plan. 
The 2003 Plan does not have an expiration date.                                 

     From February through September 2003, the Company issued 14,863,230
shares to 27 directors, employees and consultants under the 2003 Plan.          

         In March 2003, the board of directors approved, and the Company issued,
3,000,000 shares of common stock to Dennis Calvert, President and Chief         
Executive Officer of the Company, as consideration for his services. The board  
of directors subsequently modified its approval of this issuance to make it     
conditioned upon stockholder approval of the transaction because of NASDAQ      
Marketplace Rules governing change of control transactions. Mr. Calvert returned
the 3,000,000 shares to the Company. On December 9, 2003, the Company attempted 
to conduct a stockholder meeting to approve the terms of the issuance of        
3,000,000 shares of the Company's common stock to Dennis Calvert. The Company   
was unable to obtain a quorum at the meeting. The meeting was adjourned to      
December 30, 2003, but again the Company was unable to obtain a quorum. As of   
the date of the filing of this Annual Report, the 3,000,000 shares of the       
Company's common stock have not been issued to Mr. Calvert.                     

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.        

     The following table sets forth information regarding the beneficial
ownership of shares of the Company's common stock as of December 31, 2003 by (i)
all stockholders known to the Company to be beneficial owners of more than 5% of
the outstanding common stock; (ii) each director and executive officer of the   
Company individually and (iii) all directors and executive officers of the      
Company as a group. The Company has chosen to present this information as of    
December 31, 2003, because it more accurately reflects the actual voting power  
of the following persons as of such date, which is substantially higher than it 
is as of the date of the filing of this Annual Report. During 2004, several     
issuances of the Company's common stock had the effect of diluting the voting   
strength of these persons. See "Market For Common Equity and Related Stockholder
Matters".                                                                       

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--------------------------------- ------------------------ ---------------------
Name and Address of Beneficial      Amount of Beneficial     Percent of Class   
Owner (1)(2)                          Ownership (3)                             
--------------------------------- ------------------------ ---------------------
Dennis Calvert                        4,782,107 (4)               13.1%         
--------------------------------- ------------------------ ---------------------
Joseph Provenzano                       1,224,936                  3.4%         
--------------------------------- ------------------------ ---------------------
Steven Harrison                          167,043                    *           
--------------------------------- ------------------------ ---------------------
Gary Cox                                   -0-                     -0-          
--------------------------------- ------------------------ ---------------------
All directors and officers as a         6,174,086                 17.0%         
group (4 persons)                                                               
--------------------------------- ------------------------ ---------------------

* Less than 1%                                                

         (1) Except as noted in any footnotes below, each person has sole voting
power and sole dispositive power as to all of the shares shown as beneficially  
owned by them.                                                                  

     (2) Unless otherwise indicated, the address for each person is 2603
Main Street, Suite 1150, Irvine, California 92615.                              

       (3) Other than as footnoted below, none of these security holders has
the right to acquire any amount of the shares within sixty days from options,   
warrants, rights, conversion privilege, or similar obligations. The amount owned
is based on issued common stock, as well as stock options, which are currently  
exercisable.                                                                    

    (4) This amount excludes 30,869,992 shares of the Company's common
stock issuable upon conversion of the NuWay Note. However, the conversion of the
NuWay Note is subject to the prior approval of the Company's stockholders. In   
December 2003, the Company attempted to hold a stockholders' vote to approve the
conversion but was unable to obtain a quorum. The shares to be issued in        
exchange for the conversion will not be issued until such time as the proper    
stockholder approvals can be obtained. New Millennium has agreed to extend the  
terms of the NuWay Note indefinitely until such approval is obtained.           

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                         

TRANSACTIONS WITH DENNIS CALVERT                                                

   New Millennium Capital Partners, LLC Purchase of Common Stock and
Promissory Note from Mark Anderson and Affiliates                               

     In March 2003, New Millennium, which is controlled by our president
Dennis Calvert, purchased the Company's promissory note in the principal amount 
of $1,150,000 (the "NuWay Note"), which notes was held by Summitt Ventures, Inc.
("Summitt Ventures"), and purchased an aggregate of 5,000,000 shares of the     
Company's common stock from Camden Holdings and Summit Healthcare, Inc. ("Summit
Healthcare") in consideration of the New Millennium Note. Camden Holdings,      

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Summitt Ventures and Summit Healthcare are controlled by Mark Roy Anderson. The 
transaction was executed as part of a plan to remove Mr. Anderson totally from  
any involvement in the Company and provide a completely new focus and direction 
for the Company under management led by Mr. Calvert.                            

       The New Millennium Note is secured by all the shares of the Company's
common stock purchased in the transaction and is further secured by shares of   
the Company's common stock personally owned by Mr. Calvert, of which he         
currently owns none. The transaction was conditioned, among other things, on the
Company's converting the NuWay Note into shares of the Company's common stock.  

      The sellers only delivered share certificates representing 4,182,107
shares of the Company's common stock, which certificates were delivered to Mr.  
Calvert on April 9, 2003. In the New Millennium Agreement, Mr. Anderson         
represented that he was selling 100% of his stock to New Millennium and would no
longer own any of the Company's stock. Subsequent to the closing of that        
transaction, management learned through the Company's transfer agent that Camden
Holdings still owns 340,894 shares of the Company's common stock. The Company   
and New Millennium believe that the existence of these 340,894 shares of the    
Company's common stock owned by Camden Holdings Inc. is a material breach of the
New Millennium Agreement, and the Company and New Millennium are reviewing their
respective legal rights with regards to this matter.                            

        Technically, as a matter of the terms of the New Millennium Agreement,
it is possible that Camden Holdings or Mr. Anderson could reacquire the shares  
of the Company's common stock that were sold to New Millennium, should New      
Millennium default on the promissory note issued by New Millennium to Camden    
Holdings to purchase the shares, which note is secured by the purchased shares  
of the Company's common stock                                                   

Conversion of NuWay Note to Common Stock                      

        Pursuant to the NuWay Note, the Company owes New Millennium $1,120,000
plus accrued and outstanding interest. On March 26, 2003, the board of directors
of the Company voted to convert the NuWay Note into 22,400,000 shares of common 
stock of the Company, reflecting a 37.5% discount to market price. New          
Millennium consented to the proposed conversion.                                

  The business purpose of the conversion was to fulfill one of the
conditions to the transaction between New Millennium and Mr. Anderson and his   
affiliates, and to retire $1,120,000 in debt owed by the Company with the effect
increasing stockholder equity. The board of directors determined that a 37.5%   
discount to market price was appropriate given that (i) the shares into which   
the NuWay Note would be convertible would be subject to the one-year holding    
period provided by of Rule 144 prior to resale and (ii) even after such holding 
period, this large amount of shares could only be resold in the market over a   

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significant period of time in light of the volume limitations of Rule 144 that  
would apply to such resales.                                                    

        The conversion was approved by the Company's non-interested directors.
After receiving advice from the staff of NASDAQ regarding the requirements of   
applicable NASDAQ Marketplace Rules, the board of directors made the conversion 
of the NuWay Note conditional upon receiving stockholder approval of the        
conversion. New Millennium agreed to extend the terms of the NuWay Note from    
June 15, 2003 to September 15, 2003, to allow sufficient time for the Company to
obtain the requisite stockholder approval.                                      

     On December 9, 2003, the Company attempted to conduct a stockholder
meeting to approve the terms of the conversion of the Company's Promissory Note.
The Company was unable to obtain a quorum at the meeting. The meeting was       
adjourned to December 30, 2003, but again the Company was unable to obtain a    
quorum, and the conversion has not taken place as of the date of the filing of  
this Annual Report.                                                             

    Since that time, New Millennium has agreed to a further indefinite
extension of the maturity date of the NuWay Note pending stockholder approval of
the transaction. The Company has been unable to schedule such a meeting due to  
the delinquent status of its periodic reports with the SEC and limited resources
to plan the meeting.                                                            

TRANSACTIONS WITH MARK ROY ANDERSON                                             

        During the period from approximately June 2002 through March 2003, the
Company entered into several transactions with entities controlled by Mark Roy  
Anderson. These entities are Med Wireless, Genesis, Camden Holdings, Summit     
Healthcare, Summitt Ventures, Summit Oil & Gas, Inc. ("Summit Oil") and CVP. The
transactions are listed in chronological order. The Company, nor any of its     
directors or officers, has had any communication with Mr. Anderson since May    
2003.                                                                           

Financing Agreement with Camden Holdings, Inc.                

       During June 2002, as part of a plan introduced to the Company by Mark
Anderson to shift the Company's focus to the medical technology field and bring 
in new management, Camden Holdings purchased 1,000,000 shares of the Company's  
common stock for $250,000. At the time of the transaction, Camden Holdings,     
whose president at the time of the transaction was Mr. Anderson, owned no shares
in the Company, this being the initial transaction between the Company and Mr.  
Anderson and his affiliates. After this purchase, the 1,000,000 shares          
represented approximately 12.9% of the then-issued and outstanding shares of    
the Company's common stock.                                                     

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Genesis Health Tech, Inc.                                     

  On June 28, 2002, the Company purchased a database of healthcare
providers in the United States from Genesis, a wholly-owned subsidiary of Camden
Holdings, which was controlled by Mr. Anderson. The total purchase price of     
$300,000 was satisfied by the issuance of 666,667 shares of the Company's common
stock. After this purchase, the 1,666,667 shares of the Company's common stock  
beneficially owned by Mark Anderson represented approximately 19.8% of the      
then-issued and outstanding shares of the Company's common stock.               

Med Wireless, Inc.                                            

         By way of an agreement dated July 16, 2002 and amended August 21, 2002,
the Company acquired a 15-year, fully paid license to certain technology from   
Med Wireless, a company whose founder and principal stockholder was Mark Roy    
Anderson. Pursuant to the related license agreement (i) the Company would       
license from Med Wireless all of its rights and interest in certain software    
applications relating to the movement of medical images and data over the       
Internet and via handheld wireless devices as well as customer lists; (ii) Med  
Wireless would assign its customers and distribution agreements related to the  
licensed intellectual property to the Company; and (iii) the Company would      
assume $1,120,000 of outstanding debt (see further discussions below). In       
return, the Company agreed to issue to the Med Wireless stockholders an         
aggregate of 6,600,000 shares, or approximately 44%, of the Company's common    
stock.                                                                          

         Through Camden Holdings and Summit Healthcare, Mr. Anderson received an
additional 2,868,928 shares of the Company's common stock, as a result of the   
Med Wireless transaction, which increased Mr. Anderson's beneficial ownership to
4,535,595 shares, or approximately 28.3%, of the Company's common stock at the  
time this transaction was approved by the Company's stockholders. Mr. Anderson  
also held a minority interest in Med Wireless.                                  

   In addition, the Company's current president, Dennis Calvert, was
entitled to receive approximately 9.9% of the stock of Med Wireless and 600,000 
shares of the Company's common stock as a result of this transaction. Prior to  
this transaction, Mr. Calvert was not a stockholder of Med Wireless.            

        The transaction was approved by the Board of Directors and the vote of
a majority of the Company's shares of common stock, including the shares held by
Camden Holdings. Stockholders of the Company owning 3,930,183 shares of the     
7,761,353 shares then outstanding consented to the transaction with Med         
Wireless, including the shares held by Mr. Anderson and his affiliates.         

Sale of Casino Operations                                     

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     The Company sold its wholly-owned casino rental subsidiaries, Latin
American Casinos del Peru S.A., and Latin American Casinos of Colombia, LTDA, to
CVP in October 2002. Mark. Anderson was a general partner of CVP at the time of 
the transaction. Although the purchase price for the stock was $300,000, less   
all outstanding liabilities of the two subsidiaries, the outstanding liabilities
exceeded that amount and the Company received no cash in the sale. The          
transaction price was determined as a result of the Company's receiving no      
viable suitors, bidders or offers for the stock or assets of the Company's      
gaming businesses. The Company's Board of Directors approved this transaction,  
but it was not voted upon by the Company's stockholders.                        

Sale of Oil Operations                                        

         The Company entered into an agreement on December 15, 2002 to sell 100%
of the stock of NuWay Resources, Ltd. ("NuWay Resources"), the Company's oil and
gas subsidiary, for $100,000 less outstanding liabilities, to Summit Oil, whose 
president at the time of the transaction was Mark Anderson. The Company received
no cash from the sale of the stock, but was able to insure contractually that it
would not retain any liabilities, or incur new liabilities (which had been      
increasingly significantly), beyond October 1, 2002. The transaction price was  
determined as a result of the Company's receiving no other viable offers for    
NuWay Resources or its assets. The Company's board of directors approved the    
transaction, but it was not voted upon by the Company's stockholders.           

Consultancy Arrangement                                       

 Beginning in September 2002, Mark Roy Anderson also served as a
consultant to the Company pursuant to a written agreement and received 1,241,884
shares of the Company's common stock pursuant to the 2002 Plan. The Consultancy 
Agreement was terminated in December 2002.                                      

        As a result of all of the foregoing transactions, the Company believes
that Mr. Anderson was the beneficial owner of an aggregate of 5,777,479 shares, 
or more than 30%, of the Company's common stock outstanding as of December 31,  
2002, assuming Mr. Anderson beneficially owned all the shares at the same time. 
The Company believes that Mr. Anderson sold some of the shares which were issued
pursuant to the 2002 Plan, and as such the number and percentage of the         
Company's common stock held by Mr. Anderson at any one time may have been less  
than that indicated above. In any event, Mr. Anderson failed to file any reports
with the SEC on Schedules 13D or 13G, or on Forms 3 or 4, and therefore, the    
Company cannot confirm any of these numbers at any given point in time.         

ITEM 13. EXHIBITS, REPORTS ON FORM 8-K, AND INDEX TO FINANCIAL STATEMENTS.      

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(a) Index of exhibits:                                        

Exhibit No. Description of Exhibit                
----------- ----------------------                

3.1      Certificate of Incorporation (1)   

       3.2      Certificate of Amendment of Certificate of
        Incorporation filed 11/26/1991 (9)

       3.3      Certificate of Amendment of Certificate of
       Incorporation filed 6/24/1994 (9)

       3.4      Certificate of Amendment of Certificate of
        Incorporation filed 7/22/1999 (10)

       3.5      Certificate of Amendment of Certificate of
       Incorporation filed 8/31/2001 (1)

       3.6      Certificate of Amendment of Certificate of
        Incorporation filed 10/30/2002 (2)

       3.7      Certificate of Amendment of Certificate of
        Incorporation filed 12/26/2002 (2)

                3.8      Certificate of Merger merging Repossession Auction,
                       Inc. (Florida corporation) and Repossession, Inc.
(Delaware corporation) (9)

          3.9*     Certificate of Designations creating Series A
Preferred Stock           

3.10     Bylaws, as amended and restated (2)

4.3      Form of Warrant Agreement (1)      

        4.4      Form of Warrant dated December 12, 2000 (1)

                4.5      Form of 6% Convertible Debenture dated December 14,
2000 (1)                  

               4.6*     Form of Warrant to Purchase Common Stock issued to
Preferred Stock investors 

              4.7*     Warrant to Purchase Common Stock issued to Arthur
Lipper                    

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                4.8      Warrant No. AG-1 to purchase up to 6,158,381 shares
                           of NuWay Medical, Inc. common stock held by Augustine
II LLC (5)                

                 4.9*     Amended and Restated Warrant No. AG-1 to purchase up
                       to 6,158,381 shares of NuWay Medical, Inc. common
    stock held by Augustine II LLC

              10.1     Employment Agreement between the Company and Todd
  Sanders dated March 2001 (1)

                 10.2     Employment Agreement between the Company and William
  Bossung dated March 2001 (1)

                10.3     Employment Agreement between the Company and Dennis
         Calvert dated December 11, 2002 (2)

                10.4.    Employment Agreement between the Company and Joseph
        Provenzano dated March 1, 2003 (2)

            10.5     Joint Venture Agreement between the Company and
                     Rasheed & Associates dated December 1, 2002 (2)

              10.6     Lease between the Company and BJP Properties Inc.
                          dated September 15, 2002 for the premises located at
                        23461 South Pointe Drive, Suite 200, Laguna Hills,
California (2)            

                10.7     2002 Consultant Equity Plan, as amended on December
27, 2002. (3)             

           10.8     Convertible Debenture Purchase Agreement dated
December 14, 2001 (1)     

10.9     1994 Stock Option Plan (1)         

               10.10    Asset Purchase Agreement by and among the Company,
                         Camden Holdings and Genesis Health Tech, dated June
28, 2002 (2)              

                  10.11    License Agreement with Med Wireless Inc. dated August
21, 200 (2).              

                  10.12    Amendment to License Agreement with Med Wireless Inc.
  dated September 18, 2002 (2)

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                10.13    Stock and Asset Purchase Agreement by and among the
                           Company and Summit Oil & Gas, Inc. dated December 15,
2002 (2)                  

                10.14    Stock and Asset Purchase Agreement by and among the
                         Company and Casino Ventures Partners dated December
15, 2002 (2)              

        10.15    Asset Purchase Agreement by and Between New
                        Millennium Capital Partners, LLC, Camden Holdings,
                      Inc., Summit Healthcare, Inc., Summitt Ventures,
                         Inc., and Mark Anderson dated December 31, 2002 (2)

          10.16    Secured Promissory Note in the face amount of
$1,120,000 (4)            

               10.17    Secured Term Promissory Note in the face amount of
$900,000 (4)              

             10.18    Convertible Preferred Stock and Warrant Purchase
Agreement (4)             

               10.19*   Agreement to issue warrant dated February 24, 2003
                          between NuWay Medical, Inc. and Sachi International,
Inc.                      

                  10.20    Term Loan Agreement dated as of June 10, 2003 between
                  NuWay Medical, Inc. and Augustine II LLC (5)

              10.21    Stock Pledge Agreement dated as of June 10, 2003,
                     between New Millennium and Augustine II LLC (5)

              10.22    Stock Pledge Agreement dated as of June 10, 2003,
                          between NuWay Medical, Inc. and Augustine II LLC (5)

                  10.23*   Promissory Note dated November 20, 2003 between NuWay
        Medical, Inc. and James Seay, DDS.

               10.24    Promissory Note by NuWay Medical, Inc. in favor of
Augustine II, LLC (5)     

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               10.25*   Amendment No. 1 to Term Loan Agreement dated as of
                    March 30, 2004 between NuWay Medical, Inc. and
Augustine II LLC          

                10.26*   Amended and Restated Convertible Term Note by NuWay
                 Medical, Inc. in favor of Augustine II, LLC

        10.27*   Consulting Agreement with Mark Roy Anderson

10.28    2003 Stock Compensation Plan (11)  

              10.29*   Convertible Loan Agreement and Note between NuWay
      Medical, Inc. and James Burchard

           10.30    Conversion Agreement with New Millennium dated
October 16, 2003 (6)      

                 10.31    Stock Purchase Agreement with Premium Medical Group,
    Luis Ruiz and Eduardo Ruiz (7)

                  10.32    Rescission Agreement with Premium Medical Group, Luis
Ruiz and Eduardo Ruiz (8) 

14.1*    Code of Ethics                     

   21.1*    List of Subsidiaries of the Registrant

23.1*    Consent of Haskell & White LLP     

23.2*    Consent of Jeffrey S. Gilbert, CPA 

                 31.1*    Certification of Chief Executive Officer and Interim
                        Chief Financial Officer Pursuant to Section 302 of
                           the Sarbanes-Oxley Act of 2002 and Rules 13(a)-14 and
                        15(d)-14 under the Securities Exchange Act of 1934

                 32.1*    Certification of Chief Executive Officer and Interim
                           Chief Financial Officer Pursuant to 18 U.S.C. Section
1350.                     

----------                                                                      
*  Filed herewith                                                         

(1)   Incorporated herein by reference from the 10-KSB filed by the Company for 
the year ended December 31, 2001.                                   

(2)   Incorporated herein by reference from the 10-KSB filed by the Company for 
the year ended December 31, 2002.                                   

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(3)   Incorporated herein by reference from the Form S-8 filed by the Company on
    August 8, 2002, and amended on Form S-8 filed by the Company on December
27, 2002.                                                           

(4)   Incorporated herein by reference from the Form 8K filed by the Company on 
May 1, 2003.                                                        

(5)   Incorporated herein by reference from the 10-QSB filed by the Company for 
the period ending March 31, 2003.                                   

(6)   Incorporated herein by reference from the Form 8-K filed by the Company on
October 31, 2003.                                                   

(7)   Incorporated herein by reference from the Form 8-K filed by the Company on
February 17, 2004.                                                  

(8)   Incorporated herein by reference from the Form 8-K filed by the Company on
October 15, 2004.                                                   

(9)   Incorporated herein by reference from the 10-KSB filed by the Company for 
the year ended December 31, 1998                                    

(10)  Incorporated herein by reference from the 10-KSB filed by the Company for 
the year ended December 31, 1999                                    

(11)  Incorporated herein by reference from the Form S-8 filed by the Company on
February 27, 2003.                                                  

(b)  Reports on Form 8-K.                                                     

        On October 31, 2003, the Company filed a Current Report on Form 8-K in
connection with a change of control transaction involving New Millennium.       

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES                                 

      The following table summarizes the fees charged by Shubitz, and H&W,
for certain services rendered to the Company relating to fiscal year 2002, and  
Gilbert, for certain services rendered to the Company relating to fiscal year   
2003.                                                                           

    Shubitz performed audit and audit-related services relating to the
Company's Quarterly Reports on Form 10-QSB for fiscal year 2002. H&W was        
retained by the Company in 2003 to audit the Company's financial statements and 
provide audit-related services for fiscal year 2002. Gilbert was retained by the
Company in September 2004 to audit the Company's financial statements and       
provide audit-related services for fiscal year 2003. Because of the date of     
Gilbert's engagement, he did not commence audit and audit-related services until
September 2004. Accordingly, all of Gilbert's fees were billed and partially    
paid during 2004 for the audit of the 2003 fiscal year and are shown in the     
column below under "Fiscal Year 2003".                                          

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                              AMOUNT BILLED AND PAID
                             -----------------------------------------
TYPE OF FEE                     FISCAL YEAR 2002         FISCAL YEAR 2003   
-----------------                 ----------------         ----------------     
Audit(1)                              $63,163                  $74,025          
Audit-Related(2)                        3,499                    2,500          
Tax(3)                                     --                       --          
All Other(4)                               --                    5,705          
Total                             $66,663                  $83,230      

---------                                                                       
(1)   This category consists of fees for the audit of our annual financial      
 statements included in the Company's annual report on Form 10-KSB and
  review of the financial statements included in the Company's quarterly
   reports on Form 10-QSB. This category also includes advice on audit and
     accounting matters that arose during, or as a result of, the audit or the
review of interim financial statements, statutory audits required by
non-U.S. jurisdictions and the preparation of an annual "management 
letter" on internal control matters.                                

(2)   Represents services that are normally provided by the independent auditors
  in connection with statutory and regulatory filings or engagements for
those fiscal years, aggregate fees charged for assurance and related
    services that are reasonably related to the performance of the audit and
are not reported as audit fees. These services include consultations
  regarding Sarbanes-Oxley Act requirements, various SEC filings and the
implementation of new accounting requirements.                      

(3)   Represents aggregate fees charged for professional services for tax       
    compliance and preparation, tax consulting and advice, and tax planning.

(4)   Represents aggregate fees charged for products and services other than    
those services previously reported.                                 

60

10KSB 61st Page of 96 TOC 1st Previous Next ↓Bottom Just 61st
SIGNATURES

       Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this report to be signed on   
its behalf by the undersigned, thereunto duly authorized.                       

Dated: November 15, 2004            NuWay Medical, Inc.       

                                By: /s/ Dennis Calvert
                                                 -------------------------------
                                            Dennis Calvert, President,
                                             Chief Executive Officer and
                                                 Interim Chief Financial Officer

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

   NAME                         TITLE                       DATE
   ----                         -----                       ----

/s/ Dennis Calvert                                                              
---------------------------  Chairman of the Board, Chief      November 15, 2004
Dennis Calvert           Executive Officer, President                   
     and Interim Chief Financial
       Officer

/s/ Joseph Provenzano                                                           
---------------------------             Director               November 15, 2004
Joseph Provenzano                                                       

/s/ Steven V. Harrison II                                                       
---------------------------             Director               November 15, 2004
Steven  V. Harrison II                                                  

/s/ Gary Cox                                                                    
---------------------------             Director               November 15, 2004
Gary Cox                                                                

61

10KSB 62nd Page of 96 TOC 1st Previous Next ↓Bottom Just 62nd
 INDEX TO FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm -                       
Jeffrey S. Gilbert, CPA                                                      F-2

Report of Independent Registered Public Accounting Firm -                       
Haskell & White LLP                                                          F-3

Consolidated Balance Sheets as of December 31, 2003 and                         
December 31, 2002                                                            F-4

Consolidated Statements of Operations for the years                             
ended December 31, 2003 and 2002                                             F-5

Consolidated Statements of Changes in Stockholders'                             
Deficit for the years ended December 31, 2003 and 2002                       F-6

Consolidated Statements of Cash Flows for the years                             
ended December 31, 2003 and 2002                                             F-8

Notes to Consolidated Financial Statements                           F-10 - F-34

10KSB 63rd Page of 96 TOC 1st Previous Next ↓Bottom Just 63rd
 Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders                                      
NuWay Medical, Inc.                                                             

            I have audited the consolidated balance sheet of NuWay Medical, Inc.
and Subsidiary (the "Company") as of December 31, 2003 and the related          
consolidated statements of operations, changes in stockholders' deficit and cash
flows for the year then ended. These consolidated financial statements are the  
responsibility of the Company's management. My responsibility is to express an  
opinion on these consolidated financial statements based on my audit.           

       I conducted my audit in accordance with standards Of the Public
Company Accounting Oversight Board (United States). Those standards require that
I plan and perform the audit to obtain reasonable assurance about whether the   
consolidated financial statements are free of material misstatement. An audit   
includes consideration of internal control over financial reporting as a basis  
for designing audit procedures that are appropriate in the circumstances, but   
not for the purpose of expressing an opinion on the effectiveness of the        
Company's internal control over financial reporting. Accordingly, I express no  
such opinion. An audit also includes examining, on a test basis, evidence       
supporting the amounts and disclosures in the consolidated 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. I believe my audit provides a reasonable basis for my   
opinion.                                                                        

        In my opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the consolidated financial      
position of NuWay Medical, Inc. and Subsidiary as of December 31, 2003 and the  
results of their operations and their cash flows for the year then ended, in    
conformity with accounting principles generally accepted in the United States of
America.                                                                        

   As discussed in Notes 1 and 3 to the consolidated financial
statements, the Company during 2003 discontinued it remaining operations.       

    The accompanying consolidated financial statements have been
prepared assuming the Company will continue as a going concern. As discussed in 
Note 1 to the consolidated financial statements, the Company has limited liquid 
resources, recurring losses, and is seeking to implement its business plan,     
which requires the Company to acquire or develop a business. These matters raise
substantial doubt about its ability to continue as a going concern. Management's
plans in regard to these matters are also discussed in Note 1. The consolidated 
financial statements do not include any adjustment that might result from the   
outcome of this uncertainty.                                                    

                                      /s/ JEFFREY S. GILBERT

Los Angeles, California                                                         
October 26, 2004                                                                

F-2 

10KSB 64th Page of 96 TOC 1st Previous Next ↓Bottom Just 64th
 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors                                                              

NuWay Medical, Inc. (F/K/A NuWay Energy, Inc.)                                  

We have audited the accompanying consolidated balance sheet of NuWay Medical,   
Inc. and subsidiaries (the "Company") as of December 31, 2002, and the related  
consolidated statements of operations, stockholders' equity and cash flows for  
the year then ended. These consolidated financial statements are the            
responsibility of the Company's management. Our responsibility is to express an 
opinion on these consolidated financial statements based on our audit.          

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

In our opinion, the consolidated financial statements referred to above present 
fairly, in all material respects, the financial position of NuWay Medical, Inc. 
and subsidiaries as of December 31, 2002, and the results of their operations   
and their cash flows for the year ended December 31, 2002, in conformity with   
accounting principles generally accepted in the United States of America.       

As discussed in notes 1 and 4 to the consolidated financial statements, the     
Company exited several business lines during 2002 through the sale of interests 
in subsidiaries and the discontinuance of operations.                           

The accompanying consolidated financial statements have been prepared assuming  
the Company will continue as a going concern. As discussed in note 1 to the     
consolidated financial statements, the Company has limited liquid resources,    
recurring losses from operations and is seeking to implement its business plan  
with a new industry focus. These matters raise substantial doubt about its      
ability to continue as a going concern. Management's plans in regard to these   
matters are also discussed in note 1. The consolidated financial statements do  
not include any adjustments that might result from the outcome of this          
uncertainty.                                                                    

                                       /s/ HASKELL & WHITE LLP
                                   HASKELL & WHITE LLP

Irvine, California                                                              
May 12, 2003                                                                    

F-3 

10KSB 65th Page of 96 TOC 1st Previous Next ↓Bottom Just 65th
 NUWAY MEDICAL, INC AND SUBSIDIARY
 CONSOLIDATED BALANCE SHEETS
 AT DECEMBER 31, 2003 AND 2002

                                                        [Enlarge/Download Table]

                                     ASSETS                                                      
                                                                         2003           2002     
                                                                     ------------   ------------ 
                                                                                                 
CURRENT ASSETS                                                                                   
      Cash and Cash Equivalents                                      $        671   $        521 
                                                                     ------------   ------------ 
                     Total Current Assets                                     671            521 
                                                                     ------------   ------------ 
PROPERTY AND EQUIPMENT, NET                                                    --         28,844 
                                                                     ------------   ------------ 
OTHER ASSETS                                                                                     
      Marketing Database                                                       --        255,000 
      Med Wireless License                                                     --      4,090,000 
                                                                     ------------   ------------ 
                     Total Other Assets                                        --      4,345,000 
                                                                     ------------   ------------ 
TOTAL ASSETS                                                         $        671   $  4,374,365 
                                                                     ============   ============ 

                      LIABILITIES AND STOCKHOLDERS' EQUITY                                       

CURRENT LIABILITIES                                                                              
      Accounts Payable and Accrued Expenses                          $  1,256,475   $  1,131,579 
      Notes Payable                                                     1,605,000      1,120,000 
      Discount on Note, Net                                               (62,131)            -- 
      Debentures Payable, Net                                             125,000        150,000 
                                                                     ------------   ------------ 
                     Total Current Liabilities                          2,924,344      2,401,579 
                                                                     ------------   ------------ 

COMMITMENTS, CONTINGENCIES AND SUBSEQUENT EVENTS                                                 

STOCKHOLDERS' EQUITY                                                                             
      Convertible Preferred Series A, $.00067 Par Value, 25,000,000                              
           Shares Authorized, 559,322 and No Shares Issued and                                   
           Outstanding at December 31, 2003 and 2002, respectively            375             -- 
      Common Stock, $.00067 Par Value, 100,000,000 Shares                                        
           Authorized, 36,386,486 and 17,137,727 Shares Issued                                   
           at 2003 and 2002, respectively                                  23,976         11,483 
      Additional Paid-In Capital                                       23,002,818     20,289,936 
      Accumulated Deficit                                             (25,823,838)   (18,201,629)
      Treasury Stock, at cost, 44,900 Shares Held as of December                                 
           31, 2003 and 2002                                             (127,004)      (127,004)
                                                                     ------------   ------------ 
                     Total Stockholders' (Deficit) Equity              (2,923,673)     1,972,786 
                                                                     ------------   ------------ 
TOTAL LIABILITIES AND STOCKHOLDERS'S EQUITY                          $        671   $  4,374,365 
                                                                     ============   ============ 

The accompanying footnotes are an integral part of these consolidated financial 
statements

F-4 

10KSB 66th Page of 96 TOC 1st Previous Next ↓Bottom Just 66th
 NUWAY MEDICAL, INC AND SUBSIDIARY
 CONSOLIDATED STATEMENTS OF OPERATIONS
 FOR THE YEARS ENDING DECEMBER 31, 2003 AND 2002

                                                        [Enlarge/Download Table]

                                                                Year Ending December 31,   
                                                                 2003             2002     
                                                             ------------     ------------ 
                                                                                           
Revenue                                                                                    
      Rental Income                                          $         --     $         -- 
                                                             ------------     ------------ 
                     Total Revenues                                    --               -- 
                                                             ------------     ------------ 
Costs and Expenses                                                                         
      Selling, General and Administration                       2,339,264        2,157,289 
      Depreciation, Depletion and Amortization                      8,552            9,938 
      Expenses Associated With Stock Issued for Services                           987,944 
      Cancellation of Prior Year Warrant Compensation                           (1,659,750)
      Impairment of Property, Plant and Equipment                  20,292               -- 
                                                             ------------     ------------ 
                     Total Costs and Expenses                   2,368,108       (1,495,421)
                                                             ------------     ------------ 

Loss from operations                                           (2,368,108)      (1,495,421)
                                                             ------------     ------------ 
Other Income and Expense                                                                   
      Interest Expense                                           (344,832)         (45,026)
      Other Income                                                     --           51,767 
                                                             ------------     ------------ 
                     Net Other Income                          (344, 832)            6,741 
                                                             ------------     ------------ 

Loss Before Income Taxes                                       (2,712,940)      (1,488,680)

Provision for Income Taxes (Benefit)                                   --               -- 
                                                             ------------     ------------ 
Net Loss from Continuing Operations                            (2,712,940)      (1,488,680)
                                                             ------------     ------------ 
Loss from Discontinued Operations                                                          
(Includes $651,750 of depreciation and amortization expense                                
and $3,693,250 of impairment charge of intangible assets)      (4,909,269)              -- 
Loss from Discontinued Operations                                      --       (3,448,417)
                                                             ------------     ------------ 
Net Loss                                                     $ (7,622,209)    $ (4,937,097)
                                                             ============     ============ 
Loss Per Common Share - Basic and Diluted                                                  
      Loss per share from Continuing Operations              $      (0.09)    $      (0.15)
                                                             ============     ============ 
      Loss per share from Discontinued Operations            $      (0.16)    $      (0.35)
                                                             ============     ============ 
      Net Loss per Share                                     $      (0.25)    $      (0.50)
                                                             ============     ============ 
      Weighted Average Common Share Equivalents Outstanding    30,466,628        9,791,396 
                                                             ============     ============ 

The accompanying footnotes are an integral part of these consolidated financial 
statements

F-5 

10KSB 67th Page of 96 TOC 1st Previous Next ↓Bottom Just 67th
NUWAY MEDICAL, INC AND SUBSIDIARY`
 CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
 FOR THE YEARS ENDING DECEMBER 31, 2003 AND 2002

                                                        [Enlarge/Download Table]

                                     Common Stock                                                                               
                              -------------------------                 Accumulated                                             
                                 Number         Par       Additional       Other          Retained                Comprehensive 
                                   of          Value       Paid-In     Comprehensive      Earnings      Treasury      Income    
                                 Shares       $.00067      Capital     Income (Loss)      (Deficit)       Stock       (Loss)    
                              ------------  -----------  ------------  --------------  -------------- ----------- --------------
                                                                                                                                
BALANCE DECEMBER 31, 2001       5,078,783     $  3,402    15,137,225    $  (544,539)   $(13,264,532)  $(127,004)        --      

CONVERSION OF DEBENTURES        1,332,570          893     2,331,705                                                            

STOCK ISSUED FOR INTANGIBLES      666,667          447       254,553                                                            

STOCK ISSUED FOR LICENSE OF                                                                                                     
MED WIRELESS SOFTWARE           6,600,000        4,422     2,965,578                                                            

REALIZED LOSS OF FOREIGN                                                                                                        
CURRENCY TRANSACTIONS                                                       544,539                                    544,539  

WARRANTS ISSUED UNDER                                                                                                           
EMPLOYMENT AGREEMENT                                          25,000                                                            

STOCK ISSUED UNDER                                                                                                              
    COMMON STOCK                                                                                                                
    PURCHASE AGREEMENT          1,000,000          670       249,330                                                            

NET LOSS FOR THE YEAR                                                                                                           
    ENDED DECEMBER 31, 2002                                                              (4,937,097)                (4,937,097) 
                              ------------  -----------  ------------  --------------  -------------- ----------- --------------
BALANCE DECEMBER 31, 2002      17,137,727       11,483    20,289,936           --       (18,201,629)   (127,004)    (4,392,558) 
                              ------------  -----------  ------------  --------------  -------------- ----------- --------------

The accompanying footnotes are an integral part of these consolidated financial 
statements

F-6 

10KSB 68th Page of 96 TOC 1st Previous Next ↓Bottom Just 68th
NUWAY MEDICAL, INC AND SUBSIDIARY`
 CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
 FOR THE YEARS ENDING DECEMBER 31, 2003 AND 2002

                                                        [Enlarge/Download Table]

                                 Preferred Stock              Common Stock                                                 
                           -------------------------   -------------------------                 Accumulated               
                              Number         Par          Number         Par       Additional       Other       Retained   
                                of          Value           of          Value       Paid-In     Comprehensive   Earnings   
                              Shares       $.00067        Shares       $.00067      Capital     Income (Loss)   (Deficit)  
                           ------------  -----------   ------------  -----------  ------------  -------------  ----------  
                                                                                                                           
SALE OF PREFFERED STOCK      559,322          375                                                                          

STOCK ISSUED FOR SERVICES                               18,623,759      12,478      2,687,898                              

CONVERSION OF                                                                                                              
    DEBENTURES                                             625,000          14         24,984                              

NET LOSS FOR THE YEAR                                                                                                      
  ENDED DECEMBER 31, 2003                                                                                       (7,622,209)
                            ---------    ---------     ------------  ----------   ------------  -----------   -------------
BALANCE DECEMBER 31, 2003    559,322      $   375       36,386,486   $  23,976    $23,002,818    $      --    $(25,823,838)
                            =========    =========     ============  ==========   ============  ===========   =============


                                       Comprehensive                                                                       
                            Treasury       Income                                                                          
                              Stock        (Loss)                                                                          
                            ---------  -------------                                                                       
                                                                                                                           
SALE OF PREFFERED STOCK                                                                                                    

STOCK ISSUED FOR SERVICES                                                                                                  

CONVERSION OF                                                                                                              
    DEBENTURES                                                                                                             

NET LOSS FOR THE YEAR                                                                                                      
  ENDED DECEMBER 31, 2003                 (7,622,209)                                                                      
                           -----------  -------------                                                                      
BALANCE DECEMBER 31, 2003   $(127,004)  $ (7,622,209)                                                                      
                           ===========  =============                                                                      

The accompanying footnotes are an integral part of these consolidated financial 
statements

F-7 

10KSB 69th Page of 96 TOC 1st Previous Next ↓Bottom Just 69th
 NUWAY MEDICAL, INC AND SUBSIDIARY
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 FOR THE YEARS ENDING DECEMBER 31, 2003 AND 2002

                                                        [Enlarge/Download Table]

                                                                                 Years Ended December 31,  
                                                                               --------------------------- 
                                                                                   2003            2002    
                                                                               -----------     ----------- 
                                                                                                           
CASH FLOWS FROM OPERATING ACTIVITIES                                                                       
  Net Loss                                                                     $(7,622,209)    $(4,937,097)
  Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities:                              
        Depreciation, Depletion and Amortization                                   660,302           9,938 
        Issuance of Stock for Services                                           2,175,459         987,944 
        Cancellation of prior year warrant compensation                                 --      (1,659,750)
        Impairment of Intangible Assets                                          3,693,250              -- 
        Write Down of Idle Furniture, Fixtures and Office Equipment                 20,292              -- 
        Loss on disposal of Discontinued Operations                                     --       3,448,417 

        Realized Loss of Foreign Currency Translation                                   --         544,539 
        Issuance of Warrants as Compensation                                            --          25,000 
        Amortization of Discount on Note                                           183,499              -- 
        Decrease in Prepaid Expenses and Other Current Assets                           --         163,332 
        Increase in Accounts Payable and Accrued Expenses                          154,896         287,371 
                                                                               -----------     ----------- 
      Net Cash Used In Operating Activities                                       (734,511)                
                                                                                                (1,130,306)
                                                                               -----------     ----------- 
CASH FLOWS USED IN INVESTING ACTIVITIES                                                                    
      Decrease in Notes Receivable to Officers and Affiliates from                                         
           Severance Packages                                                           --         440,000 
                                                                               -----------     ----------- 
      Net Cash Used In Investing Activities                                             --         440,000 
                                                                               -----------     ----------- 
CASH FLOWS FROM FINANCING ACTIVITIES                                                                       
      Proceeds Received From Term Loans                                            470,000              -- 
      Proceeds from Sale of Preferred Stock                                        279,661              -- 
      Proceeds from Sale of Securities                                                  --         250,000 
                                                                               -----------     ----------- 
      Net Cash Provided By Financing Activities                                    734,661         250,000 
                                                                               -----------     ----------- 

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                   150        (440,306)

CASH AND CASH EQUIVALENTS - BEGINNING                                                  521         440,827 
                                                                               -----------     ----------- 

CASH AND CASH EQUIVALENTS - ENDING                                             $       671     $       521 
                                                                               ===========     =========== 

The accompanying footnotes are an integral part of these consolidated financial 
statements

F-8 

10KSB 70th Page of 96 TOC 1st Previous Next ↓Bottom Just 70th
 NUWAY MEDICAL, INC AND SUBSIDIARY
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 FOR THE YEARS ENDING DECEMBER 31, 2003 AND 2002

                                                        [Enlarge/Download Table]

                                                                        Years Ended December 31, 
                                                                      ---------------------------
                                                                          2003            2002   
                                                                      -----------     -----------
                                                                                                 
SUPPLEMENTAL DISCLOSURES OF CASHFLOW INFORMATION                                                 

Cash Paid During the Period for:                                                                 
  Interest                                                            $        --     $        --
                                                                      ===========     ===========
  Income Taxes                                                        $        --     $        --
                                                                      ===========     ===========

Conversion of Debentures and Accrued Interest to Capital              $    25,000     $ 2,332,598
                                                                      ===========     ===========
Issuance of Stock for Capitalized Assets:                                                        

  Database Purchase in Exchange for Common Stock                      $        --     $   255,000
                                                                      ===========     ===========
  License Rights from Med Wireless Inc. in Exchange for Common Stock                             
  valued at $2,970,000 and the assumption of $1,120,000 Note Payable  $        --     $ 4,090,000
                                                                      ===========     ===========

The accompanying footnotes are an integral part of these consolidated financial 
statements

F-9 

10KSB 71st Page of 96 TOC 1st Previous Next ↓Bottom Just 71st
 NUWAY MEDICAL, INC AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 AT DECEMBER 31, 2003 AND 2002

Note 1.  Business and Organization                                              

Outlook                                                                         

As of December 31, 2003, the Company had no continuing business operations.  Any
value perceived in the Company is speculative in nature and intangible in value.
The Company is operating as a public shell and its business  operations  consist
of management seeking merger and acquisition candidates with ongoing operations.

These consolidated  financial statements have been prepared assuming the Company
will continue as a going concern,  which  contemplates the realization of assets
and  satisfaction  of liabilities in the normal course of business.  During 2003
and as of  September  30,  2004,  the  Company  had  limited  liquid and capital
resources while seeking acquisition opportunities.                              

During 2003, the Company raised  $279,661 with the sale of 559,322 shares of its
Preferred  Stock,  and obtained a $425,000 term loan and a $50,000 loan.  During
the latter part of 2003 and through 2004, the Company's president incurred costs
on the Company's behalf, which totaled approximately $140,000.  During 2004, the
Company has obtained  $25,000 from the sale of 5,000,000 shares of common stock,
$5,000 for a note convertible into 250,000 common shares, and $50,000 for a note
convertible into 10,000,000  shares of preferred stock. As of December 31, 2003,
the Company had  approximately  $1,000 in cash,  which is  insufficient  to meet
operating  expenses  for any  reasonable  period of time.  The  Company  will be
required to raise additional  capital to sustain  operations for the next twelve
months and is actively seeking  investments from external  sources.  There is no
assurance  that the  Company  will be able to raise  additional  capital.  It is
unlikely  that the Company will be able to qualify for bank debt until such time
as the  Company  is  able to  demonstrate  the  financial  strength  to  provide
confidence for a lender.                                                        

The Company has relied upon its stock award plans,  the 2002  Consultant  Equity
Plan, the 2003 Stock  Compensation Plan and the Nuway Medical,  Inc. 2004 Equity
Plan,  to compensate  consultants  and employees who have assisted in developing
and executing the Company's business plan. The Company has significantly  relied
on  these  plans to  compensate  various  consultants  and  personnel,  and this
reliance  has  significantly  diluted  the loss per share.  During  2004,  these
issuances have been of  questionable  benefit in  compensating  consultants  and
employees, as there is little market interest for the Company's stock.          

Ultimately,  the  Company's  ability to continue as a going concern is dependent
upon its ability to attract new sources of capital,  establish an acquisition or
reverse  merger  candidate  with  continuing  operations,  attain  a  reasonable
threshold of  operating  efficiencies  and achieve  profitable  operations.  The
consolidated  financial  statements  do not include any  adjustments  that might
result from the outcome of these uncertainties.                                 

Organization                                                                    

F-10

10KSB 72nd Page of 96 TOC 1st Previous Next ↓Bottom Just 72nd
 NUWAY MEDICAL, INC AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 AT DECEMBER 31, 2003 AND 2002

NuWay Energy,  Inc., a Delaware  corporation  (formerly  known as Latin American
Casinos,  Inc.), changed its name to NuWay Medical Inc. (NuWay) in October 2002.
The name change  reflected  the  Company's  operating  focus after it acquired a
15-year licensing right to certain medical technology from Med Wireless, Inc. in
July 2002. (See Note 3.) The Med Wireless  software is a HIPAA (Health Insurance
Portability  and  Accountability  Act)  compliant   technological   solution  to
electronically organize, store, and retrieve medical records and medical images.
To market  this  licensing  right,  the Company  formed  NuWay  Sports  Medicine
Ventures,  LLC (subsequently  renamed NuWay Sports LLC), in which it holds a 51%
membership  interest,  in December 2002. Although formed in 2002, the subsidiary
did not become begin  operations  until 2003.  NuWay Sports developed the Player
Record Library System (PRLS),  which is a derivative product of the Med Wireless
technology.  PRLS is a secure database for athlete/patient medical data that can
be  acquired,  displayed,  analyzed,  interpreted,  and archived in a completely
digital format, which has been customized for the sports industry.  NuWay Sports
generated  $40,000 in revenue  during the first quarter of 2003 and entered into
negotiating for the possible use of the product with several professional sports
leagues and individual professional sport clubs. However, these negotiations did
not result in a transaction and the Company has had little success in generating
ongoing  revenue.  As of September 2004,  NuWay Sports had ceased  marketing the
PRLS system as a result of inadequate capital,  marketing resources,  and market
competition.  The PRLS system has not developed into a profitable  operation and
the Company is  attempting to sell its  licensing  rights and PRLS product,  but
does not have any offers with tangible value.                                   

In addition, the Company pursued a business opportunity related to an ultrasound
machine sale-leaseback  program. The business opportunity came about as a result
of the Med Wireless License transaction with the Company, but no cost associated
with this business  opportunity was recorded on the books of the Company.  Under
this  program,  the  Company  attempted  to arrange the  purchase of  ultrasound
machines by investors, who would lease the machines to the Company. In turn, the
Company would  sub-lease the  ultrasound  machines to the end user.  The Company
secured  purchase orders from both investors and prospective  end-use lessees of
the  ultrasound  machines.  These  purchase  orders  were  conditioned  upon the
Company's  ability  to  secure  financing  of its own lease  obligations  of the
ultrasound  machines from the investors.  This was not accomplished  because the
Company lacked the financial resources and credit to obtain such financing.  The
Company  continued to pursue  attempts to arrange such  financing  through March
2003.  After March 2003, the Company  focused  primarily on the Med Wireless and
PRLS  technologies and, after occasional  attempts to pursue the  sale-leaseback
program through mid-2003, this ultrasound program was no longer pursued.        

With the change in management in October 2002, the Company sold, or discontinued
operations of, its four wholly-owned  subsidiaries at October 1, 2002: (i) NuWay
Resources,  Ltd., which conducted oil and gas exploration activities,  primarily
in western  Canada;  (ii) Latin  American  Casinos del Peru,  S.A.,  (iii).Latin
American Casinos of Colombia LTDA, which were both engaged in the rental of slot
machines and other gaming  equipment to casino  operators in Latin  America and,
(iv) World's Best Rated Cigars, Inc., a marketer of premium cigars at discounted

F-11

10KSB 73rd Page of 96 TOC 1st Previous Next ↓Bottom Just 73rd
 NUWAY MEDICAL, INC AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 AT DECEMBER 31, 2003 AND 2002

prices in the United  States.  World's Best Rated Cigars was  dissolved  and the
other three subsidiaries were sold in their entirety to third parties controlled
by Mark Roy  Anderson,  a former  consultant  and principal  stockholder  of the
Company.  The sale of these operating segments was completed without recourse as
all liabilities and remaining  assets were  transferred to the purchaser in lieu
of any cash.  The  Company  recorded a loss on  disposal  of these  entities  of
$3,448,417. (See Note 4)                                                        

Note 2.  Summary of Significant Accounting Policies                             

a) Principles of Consolidation                                    

       Management  intends to sell NuWay Sports,  LLC.  Therefore as of December
       31, 2003  revenues and expenses  related to NuWay  Sports,  LLC have been
       reclassified  from  continuing  operations  to a Loss  from  Discontinued
Operations. (Note 4) There are no other subsidiaries.             

       The consolidated balance sheet at December 31, 2002 includes the accounts
       of NuWay Medical, Inc. and NuWay Sports, LLC. The Company has significant
       influence of the business  operations of NuWay Sports and  operations are
       consolidated. All significant inter-company balances have been eliminated
       in  consolidation.  Operations for NuWay Sports LLC were not  significant
       for the period from  inception  to December 31,  2002.  The  consolidated
       statements of operations  and cash flows for the year ended  December 31,
       2002 include the results of the activities of the subsidiaries  mentioned
in Note 1 above up to the date of disposal. (Note 3)              

b) Property and Equipment                                         

       On April 1, 2004 the  Company  closed its  offices and has in storage its
       furniture,  fixtures  and office  equipment.  As these items are idle and
       there is no foreseeable plan of use,  management recorded a write down of
       the  remaining net book value  totaling  $20,292 as of December 31, 2003.
       Any gain from the sale of these items would not have a material affect on
       these financial  statements.  While in use during 2003,  depreciation was
       provided on a straight-line  basis over the estimated  useful life of the
       respective  asset.  Maintenance  and  repairs  are  charged to expense as
incurred. There were no major renewals or betterments.            

c) Impairment of Long-Lived Assets                                

       The Company  periodically  reviews its  long-lived  assets for  potential
       impairment as required by Statement of Financial Accounting Standards No.
       144,  "Accounting  for  the  Impairment  of  Long-Lived  Assets  and  for
       Long-Lived Assets to be Disposed of." As discussed in Note 3, the Company
       recorded  an  impairment  charge  totaling  $3,693,250,  and  $651,750 of
       depreciation and amortization  charges  resulting in a combined total for
       Loss from  Discontinued  Operations  of  $4,909,269,  as reflected in its
Statement of Operations for the year ended December 31, 2003.     

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 AT DECEMBER 31, 2003 AND 2002

d) Subsidiary and Technology Held for Sale                        

       The Company is attempting to sell its  majority-owned  subsidiary,  NuWay
       Sports and the Med Wireless technology. Thus, as of December 31, 2003 the
       Company  has  reflected  on its  Statement  of  Operations  a  loss  from
       Discontinued  Operations  of  $4,909,269  related  to  the  Med  Wireless
       technology  and its  investment in NuWay Sports,  LLC. (Note 3) There are
       minimal future costs  expected to be incurred to sell this  subsidiary or
       the  technology  and, in  accordance  with FASB issued  Statement No. 146
       "Accounting for Costs  associated with the exit or disposal  activities",
any costs will be expensed as incurred.                           

e) Discontinued Operations-2002                                   

       As  discussed  in Note 4, the  Company  discontinued  several  operations
       during the year ended December 31, 2002.  The Company  recorded a loss of
       $3,448,417  during the fourth quarter of 2002 when these  operations were
discontinued.                                                     

f) Earnings (Loss) Per Share                                      

       The Company reports basic and diluted earnings per share (EPS) for common
       and common share equivalents.  Basic EPS is computed by dividing reported
       earnings  by the  weighted  average  shares  outstanding.  Diluted EPS is
       computed by adding to the weighted  average shares the dilutive effect if
       stock options and warrants  were  exercised  into common  stock.  For the
       years ended  December 31, 2003 and 2002,  the  denominator in the diluted
       EPS  computation is the same as the  denominator for basic EPS due to the
       anti-dilutive  effect of the warrants and stock  options on the Company's
net loss.                                                         

       For the years ended December 31, 2003 and 2002, the  computation of basic
EPS is as follows:                                                

                                              2003                2002
                                             -------------      ------------
Numerator - net loss from                                 
           continuing operations             $   2,712,940      $  1,488,680
Denominator - weighted shares                             
           outstanding                          30,466,628         9,791,396
                                             -------------      ------------
         Loss per share                      $       (0.09)     $     (0.15)
                                             =============      ============

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 AT DECEMBER 31, 2003 AND 2002

                                             2003               2002
                                             -------------      ------------
Numerator - net loss from                                 
           discontinued operations           $   4,909,269      $  3,448,417
Denominator - weighted shares                             
           outstanding                          30,466,628         9,791,396
                                             -------------      ------------
         Loss per share                      $       (0.16)     $     (0.35)
                                             =============      ============

                                             2003               2002
                                             -------------      ------------
         Numerator - net loss                $   7,622,209      $  4,937,097
Denominator - weighted shares                             
           outstanding                          30,466,628         9,791,396
                                             -------------      ------------
         Loss per share                      $       (0.25)     $     (0.50)
                                             =============      ============

g) Use of Estimates                                               

       The  preparation of financial  statements in conformity  with  accounting
       principles  generally  accepted in the United States of America  requires
       management  to make  estimates and  assumptions  that affect the reported
       amounts of assets and  liabilities,  the disclosure of contingent  assets
       and liabilities at the date of the financial statements, and revenues and
       expenses  during the period  reported.  Actual  results could differ from
       those  estimates.  Estimates  are used when  accounting  for  stock-based
       transactions,  uncollectible accounts receivable,  asset depreciation and
amortization, and taxes, among others.                            

h) Stock Options and Warrants issued for Services                 

       As permitted  under the Statement of Financial  Accounting  Standards No.
       123  (SFAS No.  123),  "Accounting  for  Stock-Based  Compensation,"  the
       Company  accounts  for  its  stock-based  compensation  to  employees  in
       accordance  with the  provisions  of  Accounting  Principles  Board (APB)
       Opinion No. 25,  "Accounting  for Stock Issued to Employees," and related
       interpretations.  The Company  provides the pro forma net  earnings,  pro
       forma earnings per share,  and stock based  compensation  plan disclosure
requirements set forth in SFAS No. 123.                           

       Had  compensation  cost for options  issued  under the 1994 Stock  Option
       Plan, as described more fully in Note 7, been  determined  based upon the
       fair value at the grant date for  options  granted,  consistent  with the
       provision  of SFAS  123,  the  Company's  net loss and net loss per share
would have been reduced to the pro forma amounts indicated below: 

F-14

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 AT DECEMBER 31, 2003 AND 2002

                                        2003              2002
                                         --------------    ---------------
   Net Loss - as reported                $(7,622,209)       $(4,937,097)
Deduct: stock-based employee                                      
compensation expenses determined                                  
  under fair value based method                  --             10,021

   Net Loss - pro forma                  $(7,622,209)       $(4,947,118)
                                         --------------    ---------------
  Loss per share - as reported                                      --

         Basic and Diluted                    $(0.25)            $(0.50)
                                         ==============    ===============
Loss per share - pro forma                                        

         Basic and Diluted                    $(0.25)            $(0.51)
                                         ==============    ===============

       For stock issued to consultants and other non-employees for services, the
       Company  records  the  expense  based  on the  fair  market  value of the
securities as of the date of the stock issuance.                  

i) Advertising                                                    

       The Company expenses all advertising  costs as incurred.  Included in the
       Statement  of   Operations  is   approximately   $4,500  and  $13,000  of
       advertising  expense  charged to operations  for the years ended December
       31,  2003  and  2002,   respectively.   During  2003,  substantially  all
       advertising  expenses to promote the  Company's  PRLS  product,  marketed
       through  NuWay  Sports,  were  paid  through  issuance  of  shares of the
Company's common stock.                                           

j) Non-Cash Transactions                                          

       The Company has  established  a policy  relative  to the  methodology  to
       determine the value assigned to each intangible acquired with or licensed
       by  the  Company  and/or  services  or  products  received  for  non-cash
       consideration  of the Company's  common stock.  The value is based on the
       market price of the Company's  common stock issued as  consideration,  at
       the date of the  agreement  of each  transaction  or when the  service is
    rendered or product is received, as adjusted for applicable discounts.

       The methods,  estimates and judgments the Company uses in applying  these
       most  critical  accounting  policies  have a  significant  impact  on the
results of the Company reports in its financial statements.       

k) Recent Accounting Pronouncements                               

       In July 2002, the FASB issued  Statement No. 146,  "Accounting  for Costs
       Associated with Exit or Disposal Activities."  Statement No. 146 requires
       companies  to  recognize  costs  associated  with the exit or disposal of
       activities  as  they  are  incurred  rather  than  at the  date a plan of
       disposal or commitment  to exit is  initiated.  Types of costs covered by
       Statement No. 146 include lease  termination  costs and certain  employee

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 AT DECEMBER 31, 2003 AND 2002

       severance  costs that are associated with a  restructuring,  discontinued
       operation,   facility  closing,  or  other  exit  or  disposal  activity.
       Statement No. 146 will apply to all exit or disposal activities initiated
after December 31, 2002.                                          

       In November 2002, the FASB issued Interpretation No. (Interpretation) 45,
       "Guarantor's  Accounting  and  Disclosure  Requirements  for  Guarantees,
       Including Indirect Guarantees of Indebtedness of Others."  Interpretation
       45 requires certain  guarantees to be recorded at fair value. In general,
       Interpretation 45 applies to contracts or indemnification agreements that
       contingently  require the  guarantor to make  payments to the  guaranteed
       party  based on  changes  in an  underlying  that is related to an asset,
       liability,  or an equity  security of the guaranteed  party.  The initial
       recognition  and  measurement   provisions  of   Interpretation   45  are
       applicable on a prospective  basis to guarantees issued or modified after
       December 31, 2002. Interpretation 45 also requires new disclosures,  even
       when the likelihood of making any payments under the guarantee is remote.
       These disclosure  requirements are effective for financial  statements of
       interim or annual  periods  ending after  December 15, 2002.  The changes
       required by  Interpretation 45 are not expected to have a material impact
       on the results of  operations,  financial  position or  liquidity  of the
Company.                                                          

Note 3.     Impairment of Intangible Assets and Discontinued Operations - 2003  

During the third quarter of 2003, management conducted an impairment analysis of
its two intangible  assets, a marketing  database  purchased from Genesis Health
Tech, Inc. and the Med Wireless  software  technology  license acquired from Med
Wireless,  Inc.  Both of those  entities  were  controlled by Mark Roy Anderson.
These two assets  were  listed on the  Company's  financial  statements  for the
period ending June 30, 2003 at values of $229,500 and $3,681,000, respectively. 

With  respect  to the  marketing  database,  management  had no  success  in its
marketing  efforts and its future use was  uncertain and at that time it had not
used the  marketing  database to market any product or generate  any revenue for
the Company,  and has thus  determined to record a 100% impairment of that asset
in the amount of $216,750.                                                      

With  respect  to the  Med  Wireless  license,  management  analyzed  the  sales
prospects  of its PRLS  system  (which is a  derivative  product  based upon the
technology  licensed  from  Med  Wireless)  to  the  various   professional  and
collegiate sports organizations.  It evaluated the successes the Company's NuWay
Sports  subsidiary  had in its sales  efforts,  and the revenue  from  projected
future sales,  and  determined  to record an  impairment  charge to the recorded
value of the Med  Wireless  license of  $1,649,594.  This amount was  calculated
projecting  sales over a three year period (calendar years 2004, 2005 and 2006),
factoring in the costs of sales and the product costs, discounting projected net
revenue  to their  present  value  using a 7.5%  interest  factor,  and  further
discounts of the Company's projections for uncertainties  relative to the timing
of acceptance of this technology.                                               

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 AT DECEMBER 31, 2003 AND 2002

It was stated in the  Company's  Quarterly  Report on Form 10-QSB for the period
ended September 30, 2003 that management did not believe that further impairment
of the Med Wireless  license  would be  necessary.  However,  due to the lack of
capital to sustain marketing,  product  development,  and operational needs, the
Company  was unable to obtain  significant  sales and had not met any  projected
results.  In  addition,  the  Company  is  attempting  to sell the NuWay  Sports
subsidiary that was marketing the PRLS system. In light of these  circumstances,
management  determined  that the book value of the license  would not exceed the
expected  discounted  cash flows of its sales  projections.  Thus management has
recorded an additional  impairment charge of $1,826,906 in the fourth quarter of
the year ending December 31, 2003. For the fiscal year ending December 31, 2003,
the Company  recorded a total impairment  charge of $3,693,250.  Of this amount,
$216,750  was  related  to the  impairment  of the  marketing  database  and the
remaining  $3,476,500 related to the Med Wireless license.  The Company recorded
an impairment  charge  totaling  $3,693,250,  and $651,750 of  depreciation  and
amortization charges related to the technology acquired in 2002.                

The book value of the  Company's  intangible  assets as of December  31, 2003 is
zero.                                                                           

The  Company  had the  following  intangible  assets at  December  31,  2002:  a
marketing database purchased from Genesis Health Tech, Inc. on June 28, 2002 and
certain software technology licensed from Med Wireless, Inc. on August 21, 2002.
Management had determined the value assigned to each of these  intangibles based
on the market  price of the  Company's  common stock at the date of agreement of
each  transaction,  as adjusted for applicable  discounts.  No amortization  was
recorded for these  intangible  assets in 2002,  as the Company did not begin to
utilize the database or generate sales of products  derived from this technology
until 2003.                                                                     

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 AT DECEMBER 31, 2003 AND 2002

During the quarter  ended  September 30, 2002,  management  valued the marketing
database at the fair market value of shares issued. On the date of issuance, the
NASDAQ  closing  price  for the  Company's  common  stock  was $.45  per  share,
resulting in a valuation of $300,000 for the 666,667 shares  issued.  Similarly,
the license  agreement was valued at the value of the assumed note  ($1,120,000)
plus $3,500,000,  or $.53 per share, which is a discount of approximately 10% to
the closing price of the stock on the date of issuance  ($.60).  The discount of
10% was  applied to the value of the stock to reflect the  restricted  nature of
the common stock issued and the inherent lack of  marketability  associated with
the issuance of such a significant block.                                       

Management  determined that because of the Company's limited financial resources
and increased  competition,  it would discontinue operations of NuWay Sports and
any  effort to exploit  the Med  Wireless  license,  including  development  and
marketing of the product.  The Company faces  increased  competition  from other
more  established  companies with more human resources and capital  recourses to
market  their  competing  products.  While  PRLS  is  narrowly  defined  in  its
application to the sports industry,  management  believes the technology related
to the PRLS and the Med  Wireless  license  could be expanded by others to serve
corporate, government or health provider markets. However, the Company is unable
to adequately support the continued  development and marketing of the product to
take  advantage of those  potential  markets.  Because  NuWay Sports was able to
demonstrate its application  with the NFL in the past, the underlying  asset and
its potential for future  deployment has potential  value to an entity  desiring
and capable of exploiting the pursuit of those customers.  Therefore, management
is actively seeking to sell NuWay Sports.                                       

The  consolidated  statement of operations  for the year ended December 31, 2003
reflects a discontinued  operations  segments  related to the abandonment of the
exploitation of the Med Wireless  technology  after a charge to impairment in an
amount  equal  to  the  remaining  net  book  value  related  to  2002  acquired
technology.  The aggregate of impairment and  depreciation  and amortization was
$4,345,000.  Although the formal decision to discontinue the operations was made
subsequent to December 31, 2003,  management  of the Company  believes that this
presentation  appropriately  reflects  the  current  activity  and status of the
Company.                                                                        

Note 4.    Discontinued Operations - 2002                                       

SALES OF ASSETS NOT IN THE ORDINARY COURSE OF BUSINESS                          

During 2002, the Company divested its businesses to focus on developing the PRLS
technology  that was developed as a derivative  product from the  acquisition of
the Med Wireless  technology.  These divested businesses included a slot machine
rental  and  remanufacturing  subsidiary  in  South  and  Central  America,  the
distribution  and sale of premium brand cigars,  and an oil and gas  development
subsidiary  in Canada.  The stock of both the slot machine  rental  subsidiaries
(Latin American Casinos Del Peru S.A., a Peruvian corporation and Latin American
Casinos  of  Colombia  LTDA,  a  Colombian  corporation),  and  the  oil and gas
subsidiary, NuWay Resources, Ltd., were sold to third parties controlled by Mark
Roy Anderson,  a former  consultant  and principal  stockholder  of the Company,
effective  October 1, 2002.  The cigar  business was shut down and  discontinued
effective November 30, 2002. A description of the discontinued  operations is as
follows:                                                                        

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 AT DECEMBER 31, 2003 AND 2002

LATIN AMERICAN CASINOS SUBSIDIARIES - HISTORY AND SALE                          

The  Company  entered  the  gaming and casino  industry  in Peru in 1994.  Since
January  1995,  the Company had been engaged in the renting of slot machines and
other  gaming  equipment to licensed  gaming  establishments  in various  cities
through its  wholly-owned  subsidiaries  Latin American Casinos Del Peru S.A., a
Peruvian  corporation  and Latin American  Casinos of Colombia LTDA, a Colombian
corporation.  In 1994, the Company formed its Peruvian  subsidiary,  and in late
1995 the Company formed its Colombian subsidiary.                               

The  Company had  concentrated  its efforts on the rental of used five reel slot
machines.  These  machines  were  purchased  at a  fraction  of the  cost of new
machines  and were  refurbished  for use in South  and  Central  America.  As of
September  30, 2002,  the Company had  approximately  300 machines  under rental
contracts in Peru and Colombia.                                                 

On December 15, 2002, the Company  entered into an agreement to sell 100 percent
of the stock of the Latin American Casinos subsidiaries,  with an effective date
of  October  1,  2002.  The  Company  realized  no cash  from  the sale of those
operating  units,  but was able to  contractually  insure that the Company would
retain no  liabilities  related to this  business  after  October 1, 2002.  As a
result of the sale, the Company recorded a loss of $1,376,733  during the fourth
quarter of 2002.                                                                

WORLD'S BEST RATED CIGAR COMPANY - HISTORY AND SALE                             

In September 1997, the Company incorporated World's Best Rated Cigar Company, as
a  wholly-owned  subsidiary,  to  distribute  premium  cigars  within the United
States.  During November 2002, the Company discontinued  operations and disposed
of the remaining  inventory and other assets. A loss of $179,750 was recorded in
the fourth quarter of 2002 as a result of this disposal.                        

NUWAY RESOURCES, LTD. - HISTORY AND SALE                                        

Beginning in July 2001, the Company  directed part of its efforts to oil and gas
exploration and development in Canada. Through its wholly-owned subsidiary NuWay
Resources,  Ltd.,  a Nevada  corporation,  the  Company  purchased a 30% working
interest in the Superb area of  Saskatchewan,  Canada and a 20% working interest
in the Altares Gas  project in  northeast  British  Columbia.  The  subsidiary's
ownership interests in the oil fields were characterized as "minority" ownership
working interests.  This  classification  meant that the controlling owners, who
were parties unaffiliated with the Company,  would direct future development and
capital  expenditures  and losses.  Despite  that lack of  control,  the Company
continued to be obligated to share in the costs on a pro-rata basis.            

While  these  properties  had  proven  reserves  of oil  and  natural  gas,  the
controlling owners ultimately found the extraction and processing of the natural
reserves had become too  difficult and too costly to continue.  Neither  project
had generated  positive cash flow to the Company after  considering  the cost of
development and administrative  and management  expenses.  Furthermore,  neither

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 AT DECEMBER 31, 2003 AND 2002

project had any expectation of generating  positive cash flow to the Company for
the foreseeable  future,  and as a working  interest owner, the Company would be
liable  for the  cost of  continued  development,  maintenance  and  re-drilling
efforts.  The  managing  owners of the  properties  have  significant  ownership
interests in other oil and gas projects and they had  communicated to management
their intent to invest their resources in other  projects,  rather than focus on
these properties.                                                               

In September 2002, the Company  publicly  announced that it intended to spin off
the oil  and gas  subsidiary,  NuWay  Resources,  Inc.  into a  separate  public
company.  At that time, the Company began negotiations with the senior ownership
party in Canada to  determine  the value and explore the  feasibility  of such a
plan.  At the same time,  the Company began a process to determine if additional
energy-related  assets could be acquired by the subsidiary as part and parcel to
the spin-off.  Management was notified during these  negotiations (in the fourth
quarter) that the senior management  partner intended to redirect their business
focus  away  from  these  assets  and  into  more  lucrative   properties.   The
uncertainties as to the future disposition of the assets, as well as uncertainty
of the potential for additional  capital call provisions and thus unknown future
liabilities, made the planned spin-off unworkable.                              

NuWay  entered  into an  agreement on December 15, 2002 with Summit Oil and Gas,
Inc.,  a  company  controlled  by Mark Roy  Anderson,  a former  consultant  and
principal stockholder of the Company, to sell the stock of NuWay Resources, Ltd.
for $100,000 less outstanding liabilities. The Company realized no cash from the
sale of these  operating  units,  but was able to  contractually  insure that it
would not retain any liabilities beyond October 1, 2002. In conjunction with the
sale of these  operations,  the Company recorded a loss of $1,290,948 during the
fourth quarter of 2002.                                                         

The  results of  operations  of the  Company's  oil and gas,  casino,  and cigar
distribution operations have been shown as discontinued operations.  The results
of operations for the  discontinued  operations for the years ended December 31,
2002 are as follows:                                                            

                                          2002
                                         -------------
Revenues                                      $     629,415     
Operating expenses                                1,230,401     
Asset impairment charges                                 --     
                                         -------------
Loss from discontinued operations                               
prior to disposal                               (600,986)   
Loss on disposal of discontinued                                
operations                                    (2,847,431)   
                                         -------------
Loss from discontinued operations             $ (3,448,417)     
                                         =============

Note 5.     Property and Equipment                                              

On  April 1,  2004  the  Company  closed  its  offices  and has in  storage  its
furniture,  fixtures and office equipment.  As these items are idle and there is
no foreseeable  plan of use,  management  recorded a write down of the remaining
balance net book value totaling $20,292 as of December 31, 2003.                

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 AT DECEMBER 31, 2003 AND 2002

During 2002,  furniture,  fixtures and office  equipment are carried at cost and
depreciated  using the  straight-line  method over the estimated useful lives of
the assets, which is five years.                                                

See Note 3 for discussion of operations  discontinued during 2002, at which time
the  Company's  remaining  assets,  except for certain  furniture,  fixtures and
office  equipment  in  its  corporate  offices,  were  sold  or  disposed  of in
connection  with the cessation of the related  operations.  This  represents the
only remaining property and equipment as of December 31, 2002.                  

                                                2003            2002
                                                ------------    ------------
Furniture, Fixtures & Office Equipment         $    42,753     $    42,753
   Less:  Accumulated Depreciation                  22,461          13,909
   Less:  Write Down of Idle Equipment              20,292              --
                                                ------------    ------------
Property and Equipment, net                    $        --     $    28,844
                                                ============    ============

Note 6.     Warrants                                                            

During 2003, the Company issued warrants to purchase a total of 7,011,036 shares
of common stock on the  following  terms:  (i) 120,000  shares to an investor in
connection with a purchase of the Company's preferred stock, at a price of $0.20
per share,  which  expires  March 7, 2006 (ii)  399,322  shares to  investors in
connection with a purchase of the Company's preferred stock, at a price of $0.20
per share,  which expires April 15, 2006 (Note 9); (iii) 6,158,381  shares to an
investor in  connection  with a loan to the  Company,  originally  at a price of
$0.16 per share,  which price adjusted to $0.035 per share in connection with an
extension of the loan  repayment  obligation,  which expires June 10, 2008 (Note
10); (iv) 333,333 shares to a consultant in connection with consulting services,
at a price of $0.06 per share,  which expires August 29, 2008. The  compensation
expense related to (iv) above is immaterial.                                    

On October 29, 2003, the Company issued an unvested  warrant to an individual to
purchase  2,000,000 shares of common stock at $0.05 a share. The warrant expired
on October 29, 2004. The Warrant was not exercisable unless and until the Holder
introduced to the Company an investor or investors  which invest net proceeds in
the Company of at least $250,000 within three months of the  introduction.  This
condition was not satisfied and the warrant expired unvested.                   

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 AT DECEMBER 31, 2003 AND 2002

In August  2002,  the  Company  issued a warrant to purchase  100,000  shares of
common  stock at $0.30 per share to a former  executive in  connection  with his
resignation  from the  Company.  The Company  recorded  compensation  expense of
$25,000 based on the difference  between the exercise price and the market price
at the date of issuance. These warrants expired unexercised February 23, 2004.  

In December  2000,  the board of directors  authorized the issuance of 3,300,000
private  five-year  stock  warrants to acquire  common stock at $1.75 per share.
1,500,000 of these warrants as well as 200,000  shares of restricted  stock were
issued  to the  then  existing  executive  officers.  Compensation  expense  was
recorded  equal to the  market  value of the  restricted  stock,  $350,000.  The
remaining  warrants were issued to  consultants  and the executive  officers for
services and were valued at $1,991,700  using the  Black-Scholes  option pricing
model using a 68.3% volatility  factor and an  interest-free  interest factor of
5.8%.  This  amount was  originally  recorded as expense in  December  2000.  In
February  2002,  3,000,000 of the  3,300,000  warrants  issued in year 2000 were
cancelled  and  $1,659,750  of  expenses  previously  recorded  in year 2000 was
reversed in  accordance  with the  provisions  of  Accounting  Principles  Board
Opinion No. 25. The remaining 300,000 warrants expire in 2005.                  

Effective  June 5, 1998,  the Company  contracted  with an investment  banker to
provide on a non-exclusive  basis to the Company assistance in possible mergers,
acquisitions and capital  structuring.  The duration of the contract is for five
years.  In  consideration  for these services,  the Company granted  warrants to
purchase an aggregate of 225,000 shares of common stock at the closing bid price
of $1.875 as of June 5, 1998. Effective February 8, 2000, the board of directors
reduced the exercise price to $1.06, which was the closing price of the stock on
that date. These warrants expired unexercised in June 2003.                     

Note 7.     Stock Compensation Plans                                            

1994 STOCK OPTION PLAN                                                          

On June 13, 1994,  the board of directors  adopted the 1994 Stock Option Plan in
which the aggregate  number of shares for which options may be granted under the
Plan shall not exceed 1,000,000  shares. In June 1999, the Company increased the
shares  allocated  to the plan to  1,500,000.  The term of each option shall not
exceed ten years from the date of granting  (five  years for options  granted to
employees  owning more than 10 percent of the  outstanding  shares of the voting
stock of the Company). The 1994 Plan terminated in June 2004.                   

At  December  31,  2003 and  2002,  the  Company  had  options  outstanding  and
exercisable as follows:                                                         

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                                       Number of         Price Per
                                      Shares             Share
                                         -----------     ---------------
Options Outstanding at December 31, 2001        237,500       $1.00 - $1.75     
Options Issued                                       --                         
Options Exercised                                    --                         
Options Expired                               (172,500)               $1.00     
                     -----------
Options Outstanding at December 31, 2002         65,000       $1.00 - $1.75     
Options Issued                                       --                         
Options Exercised                                    --                         
Options Expired                                (65,000)       $1.00 - $1.75     
                     -----------
Options Outstanding at December 31, 2003             --                         
                     ===========

All  outstanding  stock options and warrants were fully  exercisable at December
31, 2003. The following shows the years in which these options and warrants will
expire:                                                                         

                                                        [Enlarge/Download Table]

                                                                               Employee Stock    
                                                       Investment Banker         Options and     
                              Private Warrants             Warrants               Warrants       
                          ------------------------- ------------------------ --------------------
                                                                                                 
Range of Prices                $0.06 to $1.75                $1.06             $0.30 to $1.75    
---------------                                                                                  

Expired in 2003                      --                     225,000                65,000        
To Expire in 2004                    --                        --                 100,000(1)     
To Expire in 2005                 300,000                      --                     --         
------------------------- ------------------------- ------------------------ --------------------
To Expire in 2006                 559,322                      --                     --         
------------------------- ------------------------- ------------------------ --------------------
To Expire in 2008               6,491,714                      --                     --         
------------------------- ------------------------- ------------------------ --------------------

(1) See note 6                                                        

The  Company  also had  1,725,000  publicly  traded  warrants  to  purchase  the
Company's  common  stock at an exercise  price of $3.00 per share which  expired
unexercised on December 11, 2003.                                               

2002 CONSULTANT EQUITY PLAN                                                     

In August of 2002,  the board  approved  the  formation  of the 2002  Consultant
Equity  Plan  designed to allow  consultants  to be  compensated  with shares of
Company common stock for services provided to the Company.  A total of 5,000,000
shares  were  registered  under  this  plan  with the  Securities  and  Exchange
Commission  (the "SEC")  during  2002.  The Board  amended this plan in December
2002.  Approval of this plan was not submitted to the vote of the  shareholders.
Persons eligible to receive stock awards under this plan included  "consultants"
that  provide  bona fide  consulting  services  to the  Company,  excluding  any
services  incident to the raising of capital or  promotion or  maintenance  of a
market for the Company's securities. The plan is set to expire 10 years from its
inception.  A plan committee of two or more members of the Board administers the
plan.  The plan  committee  can award shares or options to purchase  shares at a

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price in its discretion, so long as the price chosen is not less than 85% of the
fair market value of the underlying shares as of the date of the grant.         

At December 31, 2002,  there were  2,636,000  of  unrestricted  shares that were
issued in January 2003 for services performed in 2002. Of this amount, 1,200,000
shares were issued to executive officers and the remaining balance was issued to
various individuals for consulting, legal and accounting services.  Compensation
and  consulting  expense  equal to the market  value of the stock at the date of
issuance totaling $645,000 was accrued in December 2002.                        

From August 2002 through February 2003, the Company issued all but 84,452 of the
5,000,000  shares  available  under this plan to  approximately  26 consultants,
employees and directors.  Part of this issuance was a grant of 1,000,000  shares
to Mr. Dennis Calvert,  president and CEO of the Company,  as consideration  for
his services.  Those  1,000,000  shares were issued in January of 2003, but were
returned by Mr. Calvert to the Company for cancellation that same month.        

2003 STOCK COMPENSATION PLAN                                                    

On February 14, 2003,  the board of directors  approved the Company's 2003 Stock
Compensation  Plan  as  a  means  of  providing  directors,  key  employees  and
consultants'  additional  incentive to provide  services  for the Company.  Both
stock options and stock grants may be made under this plan.  The Plan sets aside
up to 15,000,000 shares of the Company's common stock for these purposes,  which
were  registered  with the SEC.  Approval of this plan was not  submitted to the
vote of the  shareholders.  The Board administers this plan. The plan allows the
Board to award grants of common shares or options to purchase common shares. The
board has discretion to set the price of the options, but in no event shall that
price be less than 100% of the fair  market  value of the  shares at the time of
the grant.  The Board may at any time amend or terminate  the plan.  It does not
expire on its terms.                                                            

During  2003,  the  Company  issued   19,248,759   shares  to  approximately  37
consultants,  directors,  and  employees.  Of this total,  17,327,753  have been
registered  with the SEC,  while  the  balance  of  1,921,006  shares,  were not
registered and are restricted securities. Of the total issued in 2003, 2,633,590
relate to services performed in 2002 and 16,519,169 relate to 2003. The expenses
related to the shares  issued for 2002  services  in 2003 were  recorded  in the
Company's  financial  statements for the year ending  December 31, 2002. In 2003
there was  $1,554,700  of  expenses  recorded  related to the  issuance of these
shares.  Of this amount  $1,045,600  related to  consulting  services,  $394,000
related to legal  services,  $63,000  related to Advisory and Board of Directors
expense, $52,100 related to salary expense, and $25,000 related to the reduction
of the outstanding debentures.                                                  

At December 31, 2003, there were 900,000  unrestricted shares held, to be issued
when the Company is in  compliance  with its  regulatory  filings.  All of these
shares are to be issued and the consulting expense related to these share totals

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$81,000  and is  included in the  Accounts  Payable  and Accrued  Expenses as of
December 31, 2003 .                                                             

The board of directors approved a grant of 3,000,000 shares of stock pursuant to
the Company's 2003 Stock Compensation Plan to Mr. Dennis Calvert,  president and
CEO of the Company,  as consideration  for his services.  Those 3,000,000 shares
were issued in March 2003.  The board of  directors  subsequently  modified  its
approval of this issuance to make it conditioned  upon  stockholder  approval of
the transaction  because of NASDAQ Marketplace Rules governing change of control
transactions.  Mr. Calvert  returned those  3,000,000  shares to the Company and
they are not included in the above-described issuance.                          

Note 8.     Sale of Preferred Shares                                            

During  the  year  ended  December  31,  2003,  the  Company  entered  into  two
Convertible  Preferred Stock and Warrant Purchase Agreements whereby the Company
sold an  aggregate  of 559,322  shares of a newly  created  series of  Preferred
Stock,  Series A Convertible  Preferred  Stock,  par value $.00067,  for a total
consideration  of  $279,661.  Each  share  of the  Series A  Preferred  Stock is
convertible into one share of the Company's common stock. In addition,  for each
share of preferred  stock sold,  the purchaser  received one warrant to purchase
one share of common stock at a price of $0.20 per share. Using the Black-Scholes
pricing  model,  the Company  estimated  the fair value of these  warrants to be
approximately  $35,000,  and such amount has been netted in  additional  paid in
capital on the December 31, 2003  consolidated  balance sheet. The Black Scholes
calculation assumed a discount rate of approximately five percent, volatility of
180 percent, and no dividends.  The Series A Preferred Stock may be converted by
the holder,  at any time after six months from the purchase date and the warrant
is  exercisable  for a period  of three  years  from the  purchase  date.  These
Preferred Shares shall vote with the holders of the outstanding shares of Common
Stock and not as a separate class or series.                                    

The holders of outstanding  shares of Series 2003  Convertible  Preferred  Stock
(which  may be  referred  to as the  "Series  2003  Preferred  Stock")  shall be
entitled to receive in any fiscal year,  dividends,  if, when and as declared by
the  Board  of  Directors,  out of any  assets  at the  time  legally  available
therefore  in cash at a rate equal to 7% per share,  per annum,  of the original
liquidation  preference  of $2.00 per share,  subject to  adjustment as provided
herein.  There have been no dividends  declared by the Board of Directors of the
Company.                                                                        

Note 9.    Convertible Debentures                                               

In December 2000, the Company,  through a private  placement,  issued $3,500,000
principal amount of 6 percent Convertible Debentures to several investors. These
debentures  were  originally  due June  13,  2001 and  their  maturity  date was
subsequently  extended to December 13, 2001.  They are  convertible  into common
stock at a price of $1.75 per share.  The interest on the  debentures is payable
either in cash or shares of common  stock,  at the  discretion  of the  Company.
During 2001,  $1,100,000 of the debentures  plus accrued  interest was converted

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into 666,283 shares of the Company's  common stock.  During 2002,  $2,250,000 of
the remaining  debentures  plus accrued  interest was converted  into  1,332,570
shares of common stock.                                                         

In December 2002 the Company  received a notice from the remaining two debenture
holders  (the  "Remaining  Debenture  Holders")  requesting  conversion  of  the
remaining  outstanding  $150,000 of debentures.  The notice  provided that, as a
condition to conversion,  the certificates representing the shares issuable upon
conversion  of the  debentures  would  need  to be  delivered  to the  Remaining
Debenture  Holders  prior to the end of 2002.  Pursuant to the  request,  and to
complete the conversion,  the Company issued to the Remaining  Debenture Holders
96,006  shares of common stock and promptly  notified  the  Remaining  Debenture
Holders'  counsel  and  the  Company's   transfer  agent  of  the  approval  and
ratification of the issuance.  However, the actual certificates representing the
shares were not  delivered to the  Remaining  Debenture  Holders until the first
quarter of 2003. The Remaining  Debenture Holders then refused acceptance of the
shares,  claiming that because the actual  certificates  representing the shares
were not delivered in 2002 as specified in the conversion notice, the conversion
was  invalid  and the  debentures  would  therefore  remaining  outstanding  and
continue  to accrue  interest  until  repaid in full.  The  Remaining  Debenture
Holders then demanded full payment on their $150,000 of debentures (plus accrued
interest).                                                                      

In June 2003,  the Remaining  Debenture  Holders filed suit in the Orange County
Superior Court against the Company claiming it breached the debenture  agreement
by failing to honor the terms of the notice of  conversion.  The Company and the
Remaining  Debenture  Holders then entered into a settlement  agreement in which
the Remaining  Debenture  holders would convert the debentures into common stock
equal to approximately  $70,000.  The settlement agreement called for conversion
into stock over a period of three months.  The Company had  partially  satisfied
the  obligations  under this  agreement  as of December  31,  2003,  and further
satisfied its obligations in 2004.                                              

Note 10.    Loan Agreement                                                      

On  June  10,  2003  the  Company  entered  into a Term  Loan  Agreement  ("Loan
Agreement")  with Augustine II, LLC  ("Augustine"),  pursuant to which Augustine
agreed to loan the  Company  $420,000,  payable  in  installments  of  $250,000,
$100,000,   and  $70,000  (the  "Loan").  The  Company  received  all  scheduled
installments,  and  principal  and  interest  (at an  annual  rate of 10%)  were
originally  due in full on February  29,  2004.  Augustine,  however,  agreed to
extend the maturity  date of the Loan  Agreement to August 2004.  In addition to
the extension of the maturity date, Augustine was given the option of having the
Loan satisfied in cash or by the conversion of any remaining  principal  balance
and any accrued  interest on the Loan to shares of the Company's common stock at
a 15% discount to market, so long as Augustine's  holdings do not exceed 4.9% of
the total issued and  outstanding  shares of the  Company's  common stock at any
time. Since that time, the Company and Augustine have entered into  negotiations
to  further  extend the  maturity  date of the Loan and those  negotiations  are
currently being finalized and the new terms documented.  While the precise terms

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have not been finalized and are subject to change, the Company believes that the
loan will be extended an additional six months.  The Company recorded $23,210 of
interest  expense as of December  31,  2003.  The Loan  Agreement  is subject to
certain  requirements  that the Company make  mandatory  prepayments of the Loan
from the proceeds of any asset sales outside of the ordinary course of business,
and, on a quarterly basis, from positive cash flow. In addition, the Company may
prepay all or any  portion of the Loan at any time  without  premium or penalty.
The proceeds of the Loan were used by the Company for working capital.          

As additional  consideration for making the Loan,  Augustine  received five year
warrants to purchase up to 6,158,381  shares of the Company's common stock at an
exercise price of $0.16 per share.  The Company can require that the warrants be
exercised  if the  Company's  shares  trade at or above $0.60 per share for each
trading day within the 30 calendar  days prior to the maturity date of the Loan,
trading  volume of the shares  equals or exceeds  100,000  shares per day during
such  period,  and the  shares of the  Company's  common  stock  underlying  the
warrants have been included on a registration  statement filed with and declared
effective by the SEC prior to the maturity  date.  If these  conditions  are not
fully  satisfied by the maturity date, then Augustine may, at any time following
the  maturity  date and so long as the  warrants  remain  exercisable,  elect to
exercise all or any portion of the warrants pursuant to the "cashless  exercise"
provisions of the warrants.  Using the Black-Scholes  pricing model, the Company
allocated  approximately  $245,000  of the Loan  proceeds  to the  warrants  and
$175,000 to the note payable,  which  allocations  were made on a pro rata basis
based on the fair value of the warrants. The Black Scholes calculation assumed a
discount rate of  approximately  four percent,  volatility of 257 percent and no
dividends.  Given  that the  warrants  were  issued  in  conjunction  with  Loan
Agreement, such fair value represents an effective discount on the debt and will
be amortized  over the term of the loan.  Amortization  of this discount for the
quarter ended  December 30, 2003 was  approximately  $183,500 and is recorded as
effective  interest  expense  in  the  accompanying  consolidated  statement  of
operations.  In conjunction  with the extension of the maturity date of the Loan
from  February  2004 to August 2004,  the warrants held by Augustine to purchase
6,158,381  shares of the  Company's  common stock were  re-priced to an exercise
price of $.035 per share.                                                       

As security for the Loan, New Millennium (an affiliate of Mr.  Calvert)  pledged
2.5 million shares of the Company's  common stock owned by New  Millennium,  and
the Company has granted Augustine a security interest in its ownership  interest
in the Company's subsidiary, NuWay Sports, LLC.                                 

The sale of NuWay  Sports,  which is being  negotiated  by the  Company  with an
unrelated  third party,  is subject to the consent and release of the  Augustine
collateral  held in NuWay  Sports,  LLC.  Should the  Augustine  group choose to
decline their approval, the proposed sale of NuWay Sports, LLC would not be able
to be  consummated  by the  Company.  Discussions  have  occurred  in which  the
Augustine  Group has indicated that they would release the security  interest in
the NuWay Sports,  LLC, and replace the stock held as collateral  for additional
collateral  from  Nuway  as the  parties  agree.  Those  discussions  cannot  be
concluded until the proposed sale of NuWay Sports, LLC is more definitive.      

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Note 11.    Other Loan                                                          

On November 20, 2003, the Company  received $50,000 in exchange for a promissory
note in which it agreed to pay  $65,000  to the  lender 90 days from the date of
the loan. The Company's president personally guaranteed the note. As of March 1,
2004,  the  Company,  through a cash payment by the  Company's  president on its
behalf, has paid back $25,000 to the lender. The note is currently past due.    

Note 12.    Provision for Income Taxes                                          

Any deferred tax assets have been  subjected to a 100% valuation  allowance,  as
management is unable to determine that it is more likely than not that such will
be realized.                                                                    

Due to changes in the Company's  ownership  through  various  issuance of common
stock during 2002 and 2003, the utilization net operating loss carryforwards may
be subjected to annual  limitations  under  provisions  of the Internal  Revenue
Code.  Such  limitations  could result in the permanent loss of a portion of the
net operating loss carry forwards.  The Company has not yet evaluated the status
of its net  operating  loss carry  forwards and may not do so until such time as
the Company expects operating profits.                                          

The  Company  has not  filed its 2002 and 2003  Federal  and  State  Income  tax
returns.  Management  of the Company  does not feel that it will have a material
impact on the financial condition of the Company.                               

Note 13.    Related Party Transactions                                          

DUE TO PRESIDENT                                                                

In conjunction with the acquisition of the technology license from Med Wireless,
Inc. on August 21, 2002, the Company  assumed a $1,120,000 note with interest at
10% per annum  payable by Med  Wireless  to Summitt  Ventures,  Inc.,  a company
controlled by Mark Roy Anderson. The note is secured by the Company's assets and
was  originally due on June 15, 2003. On March 26, 2003,  Summitt  Ventures sold
the note,  together with 4,182,107  shares of the Company's common stock, to New
Millennium Capital Partners LLC ("New Millennium"),  a limited liability company
controlled  and owned by the Company's  president and family,  in exchange for a
$900,000  promissory note issued by New Millennium in favor of Summitt Ventures.
This note is secured by all of the stock of the Company owned by New  Millennium
and Mr.  Calvert.  On March 26, 2003, the Company's  board of directors voted to
convert the $1,120,000  note held by New Millennium  into  22,400,000  shares of
restricted  common stock of the Company (at a conversion  price discounted 37.5%
to the then market price of $0.08).  New Millennium  agreed to this  conversion.
Subsequent  to the vote by the board to convert the note,  the Company  received
notification from NASDAQ's Listing Qualifications Department that converting the
note without shareholder  approval violated certain NASDAQ Marketplace Rules. In

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response  to  this  notification,   the  board,  with  the  concurrence  of  New
Millennium, voted to amend its resolution and withhold issuance of the shares to
New Millennium until the Company's  shareholders  approved the conversion.  This
shareholder  vote has not taken place and the shares have not been issued to New
Millennium.                                                                     

New  Millennium  Capital  Partners,  LLC,  a Nevada  limited  liability  company
partially  owned and controlled by the Company's  President and his family as an
investment  vehicle  was  formed  in 1999.  No  individual,  entity or party (s)
associated  with the Company's  business has ever had any ownership  interest in
New Millennium and it is an independent  company.  Mark Anderson, a principal or
controlling  stockholder  of those  companies,  conditioned  the purchase by New
Millennium on the Company  converting the promissory  note to common stock.  The
conversion of the note held by New  Millennium is a matter to be brought  before
the NuWay shareholders at its next available shareholders meeting.              

The business  purpose of the  original  decision to convert the note into equity
was to  retire  $1,120,000  in  debt  owed  by the  Company  thereby  increasing
shareholder  equity by that  amount  and  avoiding a default on the note and the
insolvency and possible  liquidation of the Company. In arriving at a conversion
price,  the board of directors  determined that a 37.5% discount to market price
was  appropriate  based  on a number  of  factors,  including  that (i) with the
quantity of the shares  that would be issued,  a block of shares that size could
not be liquidated without affecting the market price of the shares, and (ii) the
shares  would be  "restricted  shares"  and could  therefore  not be sold by New
Millennium  (an  affiliate  of the Company) in the public  markets  prior to two
years from the date of the  conversion,  and thereafter  would be subject to the
volume and manner of sale  limitations  of Rule 144 under the  Securities Act of
1933.                                                                           

To allow  time for a  shareholder  vote  with  respect  to the  conversion,  New
Millennium agreed to extend the terms of the note, from June 15, 2003 to October
1, 2003.                                                                        

At the  Company's  June 6, 2003 board  meeting,  Mr.  Calvert,  on behalf of New
Millennium, and the Company, through the unanimous action of the Board (with Mr.
Calvert abstaining),  agreed that, in light of current market conditions (namely
the  significant  increase in the trading  price of the  Company's  common stock
since March 26, 2003, the date on which the conversion of the note to equity was
originally  approved by the Board,  from $0.08 to $0.28 as of June 6, 2003),  it
would be  inequitable  for New  Millennium to convert the note at the originally
agreed to $0.05 per share price. In this regard,  Mr. Calvert,  on behalf of New
Millennium,  and the Company  orally  agreed to rescind the agreement to convert
the note. In addition,  New Millennium  orally agreed with the Company to extend
the  maturity  date of the note to a first  payment  due  October 1, 2003 in the
amount of $100,000 and the balance of the principal  due on April 1, 2004,  with
interest due according to the original  terms of the note (to  correspond to the
payment  terms of the note  made by New  Millennium  in favor of  Summitt),  and
furthermore  to reduce the  Company's  obligation on the note to the extent that
New  Millennium  is able to  reduce  its  obligation  on its note  with  Summitt
Ventures.  While the prior holder of the note,  Summitt  Ventures,  purported to
condition New  Millennium's  purchase on the conversion of the note, Mr. Calvert

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has represented to the Company that due to Mr. Anderson's  actions,  Mr. Calvert
now believes  that  conversion  of the note is no longer a required  term of the
agreement between New Millennium and Summitt.                                   

The  Company  was unable to pay the note at the due date of October 1, 2003.  At
the board meeting on October 15, 2003, the board  determined to put the issue of
conversion of the note to the Company's shareholders at a special meeting of the
shareholders  scheduled for December 9, 2003.  On November 7, 2003,  the Company
with respect to that meeting filed a Definitive  14a. The  shareholders  meeting
was held on December 9, 2003,  but  adjourned  without a vote, as there were not
enough  shareholders  present to hold a vote.  The meeting was  rescheduled  for
December 30, 2003. At the December 30, 2003 shareholder  meeting,  the board was
again  advised that there was not a quorum,  and therefore the vote could not be
held.  Because  this was the second  attempt  to obtain a quorum,  and more than
4,000,000  additional  shares were required to be voted to obtain a quorum,  the
board voted to adjourn the meeting indefinitely. As of January 1, 2004, the loan
is in default  status and has not been repaid  together with $114,800 in accrued
but unpaid interest.  The amounts due to Mr. Anderson by New Millennium are also
in default.                                                                     

Technically,  under the terms of the New  Millennium  Agreement,  it is possible
that Mr. Anderson has the right to reacquire the shares of the Company's  common
stock  that were  sold to New  Millennium,  if New  Millennium  defaults  on the
promissory  note issued by New  Millennium  to Camden  Holdings to purchase  the
shares.  The New Millennium Note is purportedly  secured by the purchased shares
of the Company's common stock;  however,  New Millennium and Mr. Calvert believe
that Mr.  Anderson  has not  perfected  his security  interest in those  shares.
Moreover,  the  Augustine  Fund is the pledgee of  2,500,000 of these shares and
holds those shares as pledgee.                                                  

Note 14.   Commitments and Contingencies                                        

a)   Litigation                                                                 

The Company is a defendant  from time to time in  litigation  arising out of the
normal  course of its  business,  none of which is  expected  to have a material
adverse  effect on its  business,  operations,  financial  position or corporate
liquidity.                                                                      

During 2002, Ms. Geraldine Lyons, the Company's former Chief Financial  Officer,
sued the Company for breach of her employment contract.  The lawsuit was brought
in the Circuit  Court of the 11th Judicial  Circuit in  Miami-Dade  County in of
Florida  and was  initiated  by the filing of the  complaint  in June 2002.  The
principal  parties in the case are Ms.  Lyons,  the Company,  and the  Company's
former president Todd Sanders.  The amount at issue in her affirmative  claim is
the sum of  approximately  $25,000 due under the  contract,  and the issuance of
100,000 shares of common stock, with a guarantee that the stock could be sold by
Ms. Lyons for $300,000.  Ms. Lyons alleges that  additional  funds are due under
her employment  contract;  that the contract requires the Company guarantee that
she can sell for $300,000 the 100,000 shares of stock the Company is required to

F-30

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 NUWAY MEDICAL, INC AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 AT DECEMBER 31, 2003 AND 2002

issue her; and, that Mr. Sanders promised to purchase from her 100,000 shares of
Company  common  stock held by her at the price of $4.00 per share.  The Company
has  counter-sued  Ms. Lyons for breach of fiduciary duty,  fraud,  violation of
section 12(a)(2) of the 1933 Securities Act, violation of section 517.301 of the
Florida Statutes, negligent misrepresentation, conversion, and unjust enrichment
resulting from the required  restatement of the Company's  financial  statements
for the years ended  December 31, 2000 and December 31, 1999.  The  restatements
corrected the previous  omission of certain material  expenses related primarily
to compensation expense arising from warrants issued and repriced stock options,
as well as other errors.  The case is ongoing at this time. The Company  intends
to  vigorously  defend its  actions  and pursue  its  affirmative  claims to the
fullest extent  possible.  Management does not expect that this case will have a
material adverse effect on the Company's financial position.                    

In December 2002, the Company settled an outstanding lawsuit filed by Devenshire
Management  Corp.,  a  company  owned by the  Company's  former  president  Todd
Sanders. The settlement involved no payment of cash by the Company, and resolved
all issues relating to the Company's  obligation to remove  restrictive  legends
from stock owned by Devenshire. As part of this settlement the Company agreed to
defend,  but  not  indemnify,   Mr.  Sanders  in  the  Lyons  lawsuit  described
immediately above.                                                              

In May 2004, the Company was sued by Flight  Options,  Inc., a jet plane leasing
company, in California  Superior Court of Orange County California.  The lawsuit
alleges that the Company owes Flight Options approximately $418,300, pursuant to
a five-year  lease assigned to the Company by the Company's  former  president's
corporation,  Devonshire  Management  Corporation.  Management  of  the  Company
believes  that the  assignment  of the  lease  was not  properly  authorized  or
approved  by the  Company,  and that  because  the  former  president  failed to
identify the lease in a December 2002 settlement  agreement with the Company, he
breached the terms of that settlement  agreement and, pursuant to the settlement
agreement, must indemnify the Company for any losses owed to Flight Options. The
Company has  cross-complained  against Mr. Sanders for indemnity,  and has added
the  affirmative  claim of breach of  fiduciary  duty.  The case is still in its
initial  discovery phase, and the Court recently set the case for trial in April
2005While  the  Company  believes  that  it  has  meritorious  positions  in the
litigation,  given the  inherent  nature of  litigation,  it is not  possible to
predict  the  outcome  of this  litigation  or the  impact it would  have on the
Company.                                                                        

b)   Employment Agreements                                                      

In January 1997, the Company entered into a five year employment  agreement with
Lloyd  Lyons,   which   provided  in  part  that  in  the  event  of  a  merger,
consolidation, sale or conveyance of substantially all the assets of the Company
which  resulted  in the  discharge  of Mr.  Lyons,  he would be  entitled to 200
percent of the balance of payments  remaining  under the contract.  The contract
provided  salary  continuation  for a period of two years  after his  death.  In
January  2000,  Mr. Lyons passed away and  effective  August 2, 2000 the Company
amended its  employment  contract with his widow and primary  beneficiary of his
estate,  whereby the salary  continuation  clause  included in his  contract was

F-31

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 NUWAY MEDICAL, INC AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 AT DECEMBER 31, 2003 AND 2002

replaced  with a severance  arrangement  that  requires  the Company to pay Mrs.
Lyons  $100,000 over a one year period  commencing on the first month  following
the  termination  of her  employment  with the  Company.  Furthermore,  upon her
termination  she is to receive  100,000  shares of common  stock  pursuant to an
amendment to her employment  agreement.  The amended  employment  agreement will
obligate  the  Company  to  register  these  shares  and  reimburse  her for the
difference  in the gross  proceeds  upon the sale of such  shares and  $300,000;
regardless  of the time she holds such shares.  Effective  October 29, 2001 Mrs.
Lyons  tendered  her  resignation  and  based  upon the  terms of her  severance
agreement,  expenses of $350,000 had been recorded of which $308,000 is included
in accounts payable and accrued expenses at December 31, 2002 and 2003.         

In  January  2000  the  Company  entered  into  employment  contracts  with  two
additional individuals, both for the duration of two years and provides that The
Company be obligated for an aggregate  compensation of $115,000 in year 2000 and
$126,500  in year  2001.  Effective  August  2,  2000  both of these  employment
contracts  were amended so that,  upon the  termination  of  employment of these
individuals,  they would receive nine months  continuation of  compensation  and
35,000  shares of  common  stock.  The  Company  has  agreed  to  reimburse  the
respective employees the difference between the gross proceeds they receive upon
sale of the stock and $105,000;  regardless of the term the employees  hold such
shares.                                                                         

In December of 2002, The Company entered into a five-year  employment  agreement
with the Company's current president,  Dennis Calvert. His agreement calls for a
base monthly  income of $14,000 plus  performance  bonuses and employee  related
benefits.  He serves as  president,  Chief  Executive  Officer,  Interim CFO and
Chairman of the Board.                                                          

In March 2003, the Company  entered into a five-year  employment  agreement with
Joseph Provenzano.  Mr. Provenzano serves the Company as Secretary, Board Member
and Senior  Executive  reporting to Mr. Calvert.  His agreement calls for him to
receive not less than $10,900 per month in salary plus incentive bonuses,  stock
ownership   participation  and  employee  related  benefits.  At  the  Company's
discretion,  the Company may choose to pay up to $4,900 of this  monthly  salary
with stock in lieu of cash.                                                     

c)   Lease Commitment                                                           

The Company was  obligated on a  month-to-month  office lease at its  California
facility. This lease required monthly rentals of $7,850. All other leases are of
short duration or are on a month-to-month arrangement. Rent expense for December
31, 2002 and 2003 was $96,560 and $70,200 respectively. The lease was terminated
in April 2004.                                                                  

d)   Stock-Based Commitments                                                    

The Company  currently  utilizes the services of a number of consultants who are
compensated  with shares of common stock.  While each agreement can generally be
terminated  with a  15-day  notice,  the  Company  may  be  obligated  to  issue
additional shares to the consultants. (Note 15).                                

F-32

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 NUWAY MEDICAL, INC AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 AT DECEMBER 31, 2003 AND 2002

Note 15.    Subsequent Events                                                   

ISSUANCE OF S-8 SHARES:                                                         

NUWAY MEDICAL, INC. 2004 EQUITY PLAN                                            

On March 10, 2004,  the board of directors  approved the  Company's  2004 Equity
Plan as a means of providing directors, key employees and consultants additional
incentive  to provide  services for the  Company.  Both stock  options and stock
grants may be made under this plan. The Plan sets aside up to 20,000,000  shares
of the Company's common stock for these purposes, which were registered with the
SEC.  Approval of this plan was not  submitted to the vote of the  shareholders.
The Board  administers  this plan.  The plan allows the Board to award grants of
common shares or options to purchase common shares. As plan  administrator,  the
board has sole discretion to set the price of the options.  The Board may at any
time amend or terminate the plan. It does not expire on its terms.              

During 2004, the Company issued 9,780,000  shares to 16 consultants,  directors,
and employees.  Of this total 5,680,000 have been registered with the SEC, while
the balance, 3,500,000 shares were not registered and are restricted securities.
Of the total issued in 2004,  1,026,000  shares relate to services  performed in
2003 and 5,379,000  shares  relate to 2004.  The effect of the shares issued for
2003 services in 2004 was accrued in the Company's financial  statements for the
year ending  December 31, 2003. In 2004 there was $275,400 of expenses  recorded
related to the  issuance of these  shares.  Of this amount  $120,000  related to
consulting services, $5,400 related to legal services,  $60,000 related to Board
of Directors expense,  and $90,000 related to salary expense.  In 2004 there was
also 600,000 shares issued to the debenture  holders  eliminating  the remainder
due under the Debenture Payable.                                                

ABANDONED ACQUISITION                                                           

On January 31, 2004, the Company  entered into a Stock  Purchase  Agreement (the
"Stock  Purchase  Agreement")  with  Premium  Medical  Group,  Inc.,  a  Florida
corporation  ("PMG")  and PMG's sole  stockholders,  Eduardo A. Ruiz and Luis A.
Ruiz (the "PMG Stockholders").  Prior to this transaction, there was no business
or other relationship  between the Company and its affiliates and PMG or the PMG
Stockholders.                                                                   

Pursuant to the Stock Purchase Agreement,  the Company agreed to acquire 100% of
the shares of PMG from the PMG Stockholders in exchange for 30,000,000 shares of
the Company's common stock, subject to certain adjustments.  The exact number of
Company Shares to be issued to the PMG Stockholders was subject to adjustment in
the event  certain  revenue was  generated by PMG during one year  following the
closing  of the  transaction.  PMG had been  organized  in June 2003 to  provide
medical  products to hospitals and medical  clinics in South America,  primarily
Venezuela.  Luis A. Ruiz became a director of the Company in connection with the
transaction.                                                                    

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 AT DECEMBER 31, 2003 AND 2002

The parties had a difference in  expectations  regarding who would be ultimately
responsible  for paying for the audit of PMG that was  required in order for the
Company to complete its disclosure  obligations  under the  Securities  Exchange
Act.  Additionally,  the Company did not have a sufficient  number of authorized
and unissued  shares of its common stock to both satisfy its  obligations to the
PMG Stockholders  and to issue shares of common stock in a meaningful  financing
transaction,  given the low price per share at which the Company's  common stock
trades.  The Company lacked the financial  resources to schedule a stockholders'
meeting,  prepare a proxy  statement  and  solicit  proxies  for the  purpose of
amending its  Certificate of  Incorporation  to increase its authorized  capital
stock.                                                                          

As a result of these and other factors,  the Company and PMG never  consolidated
their operations, the Company never exercised control over PMG or its operations
and the parties never exchanged stock certificates evidencing their ownership in
each other.                                                                     

Therefore,  the parties entered into discussions and concluded  amicably that it
was in the mutual best interest of the respective companies and their respective
stockholders,  to rescind the  transactions  provided for in the Stock  Purchase
Agreement  and return all  parties to their  respective  positions  prior to the
transactions contemplated in the Stock Purchase Agreement.                      

The  parties  entered  into a  Rescission  Agreement  on October  14,  2004 that
provides, in relevant part, that (i) all transactions  contemplated by the Stock
Purchase  Agreement  shall be rescinded as if the Stock  Purchase  Agreement had
never been executed and delivered;  (ii) the parties forever waive all rights to
receive  stock in PMG and the  Company,  as the case may be;  (iii) Luis A. Ruiz
shall  resign as a director of the  Company;  and (iv) the Company and PMG shall
file  appropriate  documents with the Secretary of State of the State of Florida
with respect to the  rescission  of the  exchange of shares  provided for in the
Stock Purchase Agreement.                                                       

In  September  of  2004,  the  Company  received  a total  of  $25,000  from two
individual  investors in exchange  for the  issuance of 5,000,000  shares of its
common stock.                                                                   

In  October  2004,  the  Company  received  a total of  $50,000  from an outside
investor for the purchase of a convertible  note. The note can be converted into
10,000,000 shares of its Series A Preferred stock. The shares of preferred stock
are convertible  into common stock on a one for one basis. The Company agreed to
offer Piggyback  Registration rights with these common shares. In addition,  the
Company  agreed to  repurchase  the preferred  shares,  at the  investor's  sole
discretion, after the end of one year at a price equal to 110% of the investment
amount.  The Company's  president further  personally  guaranteed the repurchase
terms.                                                                          

F-34

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 EXHIBIT INDEX

Exhibit No.          Description of Exhibit                       
----------           ----------------------                       

        3.9      Certificate of Designations creating Series A Preferred Stock

       4.6      Form of Warrant to Purchase Common Stock issued to Preferred
Stock investors                             

   4.7      Warrant to Purchase Common Stock issued to Arthur Lipper

  4.9      Amended and Restated Warrant No. AG-1 to purchase up to
                6,158,381 shares of NuWay Medical, Inc. common stock held by
Augustine II LLC                            

         10.19    Agreement  to issue  warrant  dated  February 24, 2003 between
     NuWay Medical, Inc. and Sachi International, Inc.

         10.23    Promissory Note dated November 20, 2003 between NuWay Medical,
Inc. and James Seay, DDS.                   

       10.25    Amendment No. 1 to Term Loan Agreement dated as of March 30,
         2004 between NuWay Medical, Inc. and Augustine II LLC

       10.26    Amended and Restated Convertible Term Note by NuWay Medical,
Inc. in favor of Augustine II, LLC          

10.27    Consulting Agreement with Mark Roy Anderson          

     10.29    Convertible Loan Agreement and Note between NuWay Medical,
Inc. and James Burchard                     

14.1     Code of Ethics                                       

21.1     List of Subsidiaries of the Registrant               

23.1     Consent of Haskell & White LLP                       

23.2     Consent of Jeffrey S. Gilbert, CPA                   

    31.1     Certificationof Chief Executive Officer and Interim Chief
    Financial Officer Pursuant to Section 302 of the
              Sarbanes-Oxley Act of 2002 and Rules 13(a)-14 and 15(d)-14
under the Securities Exchange Act of 1934   

     32.1     Certification of Chief Executive Officer and Interim Chief
         Financial Officer Pursuant to 18 U.S.C. Section 1350.

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Dates Referenced Herein and Documents Incorporated by Reference

		Referenced-On Page
This ‘10KSB’ Filing	Date	First	Last	Other Filings

	8/29/08	22	82	4
	8/10/08	22
	6/10/08	82		4
	4/15/06	22	82
	3/7/06	22	82
	12/11/05	21
	12/31/04	7	26	10KSB, 5, NT 10-K
Filed as of:	11/16/04
Filed on:	11/15/04	61
	10/29/04	22	82
	10/26/04	63
	10/21/04	1	21
	10/15/04	59		4, 4/A, 8-K
	10/14/04	10	95	4, 4/A, 8-K
	10/1/04	27
	9/30/04	33	71	10QSB
	9/16/04	40		8-K, 8-K/A
	9/10/04	40		8-K
	9/9/04	40	41	8-K, 8-K/A
	8/19/04	17
	6/13/04	47
	5/1/04	22
	4/1/04	17	90	NTN 10K
	3/30/04	58	96	4
	3/11/04	33
	3/10/04	94		S-8
	3/1/04	89
	2/29/04	34	87
	2/23/04	24	83
	2/17/04	59		8-K
	1/31/04	9	94	3
	1/1/04	38	91
For Period End:	12/31/03	1	95	NTN 10K
	12/30/03	19	91
	12/11/03	84
	12/9/03	19	91	DEF 14A
	11/20/03	23	96
	11/7/03	37	91	DEF 14A
	10/31/03	59		8-K
	10/29/03	23	82
	10/16/03	58		8-K
	10/15/03	37	91
	10/1/03	37	91
	9/30/03	78		10QSB, NT 10-Q
	9/17/03	40
	9/15/03	52
	9/8/03	17
	9/1/03	27
	6/30/03	77		10QSB
	6/15/03	36	90
	6/10/03	20	87	8-K
	6/6/03	20	90
	6/3/03	17
	5/17/03	15
	5/16/03	44
	5/12/03	64
	5/1/03	59		8-K/A
	4/10/03	40		8-K, 8-K/A
	4/9/03	51		3
	4/7/03	40		8-K
	3/31/03	21	59	10QSB, 8-K, 8-K/A
	3/26/03	36	90	8-K
	3/18/03	46
	3/1/03	56
	2/27/03	49	59	S-8
	2/24/03	57	96
	2/14/03	85
	1/9/03	46
	12/31/02	2	95	10KSB, NT 10-K
	12/27/02	48	59	S-8
	12/15/02	32	81
	12/11/02	56
	12/1/02	56
	11/30/02	79
	11/22/02	20
	10/1/02	54	81
	9/30/02	32	80	10QSB, NTN 10Q
	9/18/02	56
	9/15/02	56
	8/21/02	36	89
	8/8/02	59		S-8
	7/16/02	53
	6/28/02	14	78
	4/18/02	20
	3/11/02	20		8-K
	12/31/01	30	58	10KSB, NT 10-K
	12/14/01	56
	12/13/01	86
	10/29/01	93
	6/13/01	86
	12/31/00	18	92	10KSB, 10KSB/A, 4, 5
	12/14/00	55		8-K
	12/12/00	55
	8/2/00	92	93
	2/8/00	83
	12/31/99	18	92	10KSB, NT 10-K
	12/31/98	59		10KSB, NT 10-K
	10/31/98	20
	6/5/98	83
	6/13/94	83
				List all Filings

19 Subsequent Filings that Reference this Filing

  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 4/12/24  Biolargo, Inc.                    S-1                    6:2M                                     RDG Filings/FA
 4/12/24  Biolargo, Inc.                    POS AM                 5:1.8M                                   RDG Filings/FA
 4/12/24  Biolargo, Inc.                    POS AM                 5:1.8M                                   RDG Filings/FA
 4/01/24  Biolargo, Inc.                    10-K       12/31/23   79:9.5M                                   RDG Filings/FA
 4/27/23  Biolargo, Inc.                    S-1                    5:1.9M                                   RDG Filings/FA
 4/27/23  Biolargo, Inc.                    POS AM                 3:1.8M                                   RDG Filings/FA
 4/14/23  Biolargo, Inc.                    POS AM                 4:1.8M                                   RDG Filings/FA
 3/31/23  Biolargo, Inc.                    10-K       12/31/22   77:9.4M                                   RDG Filings/FA
 1/11/23  Biolargo, Inc.                    S-1/A                  5:2.6M                                   RDG Filings/FA
12/23/22  Biolargo, Inc.                    S-1                    5:2.7M                                   RDG Filings/FA
 4/14/22  Biolargo, Inc.                    POS AM      4/13/22    2:1.9M                                   RDG Filings/FA
 4/14/22  Biolargo, Inc.                    POS AM      4/13/22    2:1.9M                                   RDG Filings/FA
 4/14/22  Biolargo, Inc.                    POS AM      4/13/22    2:1.8M                                   RDG Filings/FA
 3/31/22  Biolargo, Inc.                    10-K       12/31/21   73:9.3M                                   RDG Filings/FA
 4/08/21  Biolargo, Inc.                    POS AM      4/07/21    2:1.9M                                   RDG Filings/FA
 4/07/21  Biolargo, Inc.                    POS AM                 2:1.8M                                   RDG Filings/FA
 4/07/21  Biolargo, Inc.                    POS AM                 2:2M                                     RDG Filings/FA
 4/07/21  Biolargo, Inc.                    POS AM                 2:1.9M                                   RDG Filings/FA
 3/30/21  Biolargo, Inc.                    10-K       12/31/20   73:9.1M                                   RDG Filings/FA

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Filing Submission 0001144204-04-019205 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

Biolargo, Inc. – ‘10KSB’ for 12/31/03

On: Monday, 11/15/04, at 7:40pm ET · As of: 11/16/04 · For: 12/31/03 · Accession #: 1144204-4-19205 · File #: 0-19709

Annual Report — Small Business — Form 10-KSBFiling Table of Contents

10KSB — Annual Report — Small BusinessDocument Table of Contents

Dates Referenced Herein and Documents Incorporated by Reference

19 Subsequent Filings that Reference this Filing

Annual Report — Small Business — Form 10-KSB
Filing Table of Contents

10KSB — Annual Report — Small Business
Document Table of Contents