F-17

SOLARATTIC, INC.
STATEMENTSOF CASH FLOWS (Continued)
(UNAUDITED)

NOTES TO UNAUDITED FINANCIAL STATEMENTS

.

Note 1

Unaudited statements

The interim financial statements are unaudited but have been prepared on a basis substantially
consistent with the audited financial statements appearing in this Prospectus.In the opinion of
management, all necessary adjustments (consisting of normal recurring adjustments) have been
included to present fairly the unaudited six month period results when read in conjunction with the
audited financial statements.The results of operations for any interim period are not necessarily
indicative of results for the full year.These unaudited financial statements should be read in
conjunction with the Company’s audited financial statements presented herein.

Note 2

Stock options and warrants

Stock option information contained in the audited financials remains unchanged from December
31, 1998.There are no stock warrants outstanding.

Note 3

Stock option plan

Stockoptionplaninformationcontainedintheauditedfinancialsremainsunchangedfrom
December 31, 1998.See “Employee Stock Option Plan” and “Notes to Audited Financials.”

Note 4Research and development
7
Research and development costs are charged to operations as incurred and totaled $1,049 and

$4,031 for the six-month periods ending June 30, 1997 and 1998, respectively.

Note 5

Officer Note

On June 7, 1999 James F. Stanley, a vice president, loaned the Company $8,000 in cash for
the purpose of purchasing inventory.The loan is a short-term note bearing a simple interest rate of
5.00% per annum and is carried on the Company’s balance sheet statement as an addition to
“Current maturities of notes payable to officers.”

Six Month Periods Ending June 30

1998

1999

Supplemental Disclosures of Cash Flow
Information
Cash payments for interest
Income taxes paid

$7,842
$-

$9,219
$-

Supplemental Schedule of Noncash Investing
and Financing Activities
Issuance of common stock for prepaid rent

$-

$

24,820

See Notes to Unaudited Financial Statements.