F-4

SOLARATTIC, INC.
STATEMENTSOF OPERATIONS

Year Ended December 31

1997

1998

Revenues

$

61,853

$

117,755

Cost of Goods Sold

28,857

63,045

Gross profit

32,996

54,710

Operating Expenses

180,897

187,150

Operating loss

(147,901)

(132,440)

Interest Expense

11,659

16,900

Net loss

$

(159,560)

$

(149,340)

Weighted Average Common Shares
Outstanding

9,247,613

9,544,986

See Notes to Financial Statements.

F-5

SOLARATTIC, INC.
STATEMENTSOF STOCKHOLDERS’ EQUITY

Year Ended December 31, 1997 and 1998

Retained
Earnings
(Deficit)

Total
Stockholders
Equity

Common Stock
SharesAmount

Stock Notes
Receivable

December 31, 1996

8,977,216

$

544,353

$-

$

(433,099)

$

111,254

Issuance of stock
Stock issued for rent
Stock issued for services
Net loss

279,426
124,110
5,000
-

92,070
49,644
5,000
-

-
-
-
-

-
-
-
(159,560)

92,070
49,644
5,000
(159,560)

December 31, 1997

9,385,752

691,067

-

(592,659)

98,408

Issuance of stock
Stock issued for services
Stock issuance expense
Stock notes receivable
Net loss

591,526
2,400
-
-
-

144,365
12,000
(7,000)

-
-
-
(33,500)
-

-
-
-
-
(149,340)

144,365
12,000
(7,000)
(33,500)
(149,340)

-

December 31, 1998

9,979,678

$

840,432

$

(33,500)

$

(741,999)

$

64,933

See Notes to Financial Statements

F-6

SOLARATTIC, INC.
STATEMENTSOF CASH FLOWS

Year Ended December 31

1997

1998

Cash Flows From Operating Activities
Net loss$
Adjustments to reconcile net loss to net cash flows
from operating activities:
Depreciation
Amortization
Amortization of prepaid rent from stock
Issuance of common stock for services
(Increase) decrease in operating assets:
Accounts receivable
Inventory
Prepaid expenses
Prepaid stock issuance costs
Increase (decrease) in operating liabilities:
Accounts payable and accrued liabilities
Other liabilities

(159,560)

$

(149,340)

8,372
11,156
18,617
5,000

8,919
11,156
24,822
12,000

(7,806)
5,932
(5,500)
(5,694)

(2,197)
(7,527)
(1,459)
(25,461)

1,600
42,400

45,633
7,423

Net cash flows from operating activities

(85,483)

(76,031)

Cash Flows From Investing Activities
Increase in due from officers, net
Purchase of equipment

(12,992)
(20,395)

(10,720)
—

Net cash flows from investing activities

(33,387)

(10,720)

Cash Flows From Financing Activities
Proceeds from issuance of common stock
Stock issuance expense
Proceeds from note payable to officer
Payments on note payable to officer

92,070
—
11,718
(468)

110,865
(7,000)
—
(783)

Net cash flows from financing activities

103,320

103,082

Change in cash and equivalents

(15,550)

16,331

Cash and Equivalents
Beginning of year

29,698

14,148

End of year

$

14,148

$

30,479

See Notes to Financial Statements.