Years ended December 31,
                                                                          Seven Months    -----------------------
                                                                         ended  July  31,
                                                                             2002           2001          2000
                                                                             ----           ----          ----
CASH  FLOWS  -  OPERATING  ACTIVITIES:
  Net (loss)                                                              $(2,075,445)   $(5,527,352)  $(6,162,867)
                                                                          ------------  -------------  ------------
   Adjustments to reconcile net (loss) to net cash used in operations:
    Depreciation                                                              134,966        230,997       100,461
    Services paid with Warrants                                               390,492         18,333            --
    Services & settlements paid with Common Stock                             969,130        190,000       157,500
    Interest expense - issuance of Convertible Debt                           127,203        757,090            --
    Interest expense - issuance of Convertible Debt (Warrants portion)        276,922         71,995            --
    Decrease (increase) in:
      Accounts receivable                                                      93,697       (103,706)           --
      Prepaid expenses                                                       (135,534)            --            --
      Deposits & other assets                                                 (28,857)      (136,225)           --
    Increase (decrease) in:
      Deferred revenue                                                       (427,091)       463,935       358,990
      Accounts payable                                                        120,131        206,495       403,191
      Accounts payable - related parties                                           --         85,000            --
      Other current liabilities                                               (41,778)     1,371,573         1,917
                                                                          ------------  -------------  ------------
   Total adjustments                                                        1,479,281      3,155,487     1,022,059
                                                                          ------------  -------------  ------------
Total cash (used in) operating activities                                    (596,164)    (2,371,865)   (5,140,808)
                                                                          ------------  -------------  ------------
CASH FLOWS - INVESTING ACTIVITIES:
  Cash acquired in merger                                                          --          5,964            --
  Purchase of fixed assets                                                    (14,818)            --      (401,601)
                                                                          ------------  -------------  ------------
  Total cash provided by (used in) investing activities                       (14,818)         5,964      (401,601)
                                                                          ------------  -------------  ------------

CASH FLOWS - FINANCING ACTIVITIES:
  Proceeds from issuance of Convertible Debt                                  791,500        870,000            --
  Proceeds from issuance of Notes Payable - Related Parties                        --        166,666       150,000
  Proceeds from issuance of Preferred Stock                                        --      1,324,000     5,553,725
  Proceeds from issuance of Common Stock                                           --        200,000            --
  Payments on Lease Obligations                                               (34,863)      (224,828)      (86,650)
  Proceeds from conversion of Warrants & Options                              134,528             --            --
                                                                          ------------  -------------  ------------
Total cash provided by financing activities                                   891,165      2,335,838     5,617,075
                                                                          ------------  -------------  ------------

Net increase (decrease) in cash                                           $   280,183    $   (30,063)  $         0
Cash - beginning of the periods                                                44,603         74,666        74,666
                                                                          ------------  -------------  ------------
Cash - end of the periods                                                 $   324,786    $    44,603   $    74,666
                                                                          ============  =============  ============


SUPPLEMENTAL  SCHEDULE  OF  NON-CASH  INVESTING  AND  FINANCING  ACTIVITIES:
     For  the  seven months ended July 31, 2002 and the years ended December 31, 2001  and  2000,  the  Company
paid  $-0-  for  income  taxes (all periods) and $22,206, $60,897 and 24,694 for interest,  respectively.  The
Company issued stock and warrants for services. For the seven months ended July 31, 2002 the  amounts  were
$969,130  in common  stock  and  $390,492  in  warrants; in 2001, $190,000 in common stock and $18,333  in
warrants  and,  in  2000, $157,500  in  common  stock.

        The accompanying notes are an integral part of the consolidated financial statements.