Edgar Filing: NETWORK INSTALLATION CORP

FILE NO._____

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

NETWORK INSTALLATION CORPORATION
(Name of small business issuer in its charter)

Nevada 4899 88-0394012
------- ---------- ----------
(State or jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or Classification Code Number) Identification
organization No.)

18 Technology Drive, Suite 140A, Irvine, California 92618
Telephone: (949)753-7551
-------------
(Address and telephone number of principal executive offices)

18 Technology Drive, Suite 140A, Irvine, California 92618
Telephone: (949)753-7551
-------------
(Address of principal place of business or intended principal place of business)

Michael Cummings
Chief Executive Officer
18 Technology Drive
Suite 140A
Irvine, California 92618
(949)753-7551
-------------

COPY TO:

Amy M. Trombly, Esq.
Trombly Business Law
1163 Walnut St., Ste. 7
Newton, MA 02461
(617) 243-0060

(Name, address and telephone number of agent for service)

Approximate date of proposed sale to the public: As soon as practicable after
this Registration Statement becomes effective.

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

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

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

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

If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 check the following box. [X]

CALCULATION OF REGISTRATION FEE

Proposed
Title of each maximum Proposed maximum Amount of
class of securities Amount to be offering price aggregate offering Registration
to be registered registered per unit price fee

Common Stock,
$.001 Par Value 2,290,318 $3.03 $6,939,664 $879.00

(1) Pursuant to Rule 416(a) of the Securities Act of 1933, as amended (the
"Act"), this registration statement shall be deemed to cover additional
securities that may be offered or issued to prevent dilution resulting from
tock splits, stock dividends or similar transactions.

(2) The price of $3.03 per share, which was the average of the high and low
prices of the Registrant's Common Stock, as reported on the Over-The-Counter
Bulletin Board on July 25, 2004 is set forth solely for purposes of
calculating the registration fee pursuant to Rule 457(c) of the Securities Act
Of 1933, as amended.

The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is declared effective. This prospectus is not
an offer to sell these securities, and we are not soliciting offers to buy these
securities, in any state where the offer or sale is not permitted.

PROSPECTUS
NETWORK INSTALLATION CORPORATION
OFFERING UP TO 2,290,318 COMMON SHARES

This prospectus relates to the resale of up to 2,290,318 shares of our common
stock. 1,420,001 shares of common stock covered by this prospectus are to be
sold by 29 selling shareholders who will receive all of the proceeds from such
sales. We will not receive any proceeds from the sale of the 1,420,001 shares.
However, we may receive proceeds from the sale of 100,000 common shares to
C.C.R.I. if C.C.R.I. exercises warrants that it currently holds. The warrants
held by C.C.R.I. can be exercised at either $5.00 or $7.50 and expire in
September 2008. Additionally, 24 of our selling shareholders hold a total of
770,317 warrants. Each warrant allows the holder to purchase one share of our
common stock at an exercise price of $5.00. The warrants expire in May 2009.
However, we do not believe C.C.R.I. or the other selling shareholders will
exercise the warrants in the near future because the exercise prices of $5.00
and $7.50 are higher than the current trading price of our stock. All costs
associated with this registration will be borne by us.

The shares of common stock are being offered for sale by the selling
stockholders at prices established on the Over-the-Counter Bulletin Board or in
negotiated transactions during the term of this offering. Our common stock is
quoted on the Over-the-Counter Bulletin Board under the symbol NWIS.OB. On July
25, 2004, the last reported sale price of our common stock was $3.00 per share.

THIS INVESTMENT INVOLVES A HIGH DEGREE OF RISK.
YOU SHOULD PURCHASE SECURITIES ONLY IF YOU CAN AFFORD A COMPLETE LOSS.

SEE "RISK FACTORS" BEGINNING ON PAGE 8.

You should rely only on the information provided in this prospectus or any
supplement to this prospectus and information incorporated by reference. We have
not authorized anyone else to provide you with different information. Neither
the delivery of this prospectus nor any distribution of the shares of common
stock pursuant to this prospectus shall, under any circumstances, create any
implication that there has been no change in our affairs since the date of this
prospectus.

Neither the Securities and Exchange Commission nor any state securities
regulator has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this prospectus. It is a criminal offense to make any
representation to the contrary.

Subject to Completion, the date of this prospectus is July 27, 2004.

TABLE OF CONTENTS

PROSPECTUS SUMMARY 4
RISK FACTORS 8
USE OF PROCEEDS 12
DETERMINATION OF OFFERING PRICE 12
SELLING SECURITY HOLDERS 13
PLAN OF DISTRIBUTION 14
LEGAL PROCEEDINGS 15
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS 16
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 18
DESCRIPTION OF SECURITIES 19
INTEREST OF NAMED EXPERTS AND COUNSEL 19
DISCLOSURE OF COMMISSION POSITION OF INDEMNIFICATION FOR SECURITIES
ACT LIABILITIES 19
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS 20
DESCRIPTION OF BUSINESS 21
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION 27
DESCRIPTION OF PROPERTY 32
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 32
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS 37
EXECUTIVE COMPENSATION 38
FINANCIAL STATEMENTS F1-F27

PROSPECTUS SUMMARY

The following information is a summary of the prospectus and it does not contain
all of the information you should consider before making an investment decision.
You should read the entire prospectus carefully, including the financial
statements and the notes relating to the financial statements.

OUR COMPANY

We are a project engineering company that designs and installs specialty
communication systems for data, voice, video and telecom. We determine our
clients' requirements by doing a need analysis and site audit. Then we implement
our design and specification of the specialty communication system, which may
include Wireless Fidelity, or Wi-Fi, with the deployment of a fixed Wireless
Local Area Network. We believe we can integrate superior solutions across a vast
majority of communication requirements because we have experts in each aspect of
communication services from the design, project management, and the installation
of our products through the maintaining of our products. We earn revenue for
services rendered which include: (i) the installation of data, voice, video and
telecom networks; (ii) the sale of networking products that are installed and
(iii) consulting services in the assessment of existing networks.

We have a multi-faceted approach to our business model. One is the continued
focus on our core competency of project management in wired networking
infrastructure, design, installation and support of data, voice and video
communications solutions. Second, is to leverage that expertise in our pursuit
of the infrastructure build-out of Wi-Fi, Wireless Local Area Networks and Voice
over Internet Protocol, or VoIP, applications.

With our experience and expertise in the wired networking infrastructure
industry, we can design, manage, install and service our wireless customers with
the same processes, personnel and management. Many of our competitors are new to
deploying wireless infrastructure and have never installed any type of
infrastructure. We believe we can leverage our expertise to compete in this new
technology. We conduct operations through our subsidiaries.

On March 1, 2004, we acquired Del Mar Systems International, Inc., a
telecommunications solutions provider. We now have the ability to provide
integrated telecom solutions to customers ranging in size from 10 to 30,000
users. Del Mar provides Avaya Enterprise Class IP Solutions to customers as a
way to capitalize on the benefits of IP (Internet Protocol) Telephony. Avaya
offers a complete communications architecture that provides software,
infrastructure and services to help enterprises stay efficient. Del Mar Systems
offers both onsite and remote administration of systems equipped with remote
access dial up lines. Del Mar has delivered communication solutions to many well
known companies including General Electric, Western Digital, Bank of America,
Marriott, Holiday Inn, Sheraton and Hilton Hotels throughout the U.S.

HOW TO CONTACT US

Our executive offices are located at 18 Technology Drive, Suite 140A, Irvine,
California, 92618. Our phone number is (949) 753-7551. Our website address is
www.networkinstallationcorp.net. Information contained on our website does not
constitute part of this report and our address should not be used as a hyperlink
to our website.

SALES BY OUR SELLING STOCKHOLDERS

This prospectus relates to the resale of up to 2,290,318 shares of our common
stock by current stockholders and by C.C.R.I., who may acquire shares of our
common stock by exercising warrants.

The table below sets forth the shares that we are registering pursuant to the
Registration Statement to which this prospectus is a part:

Stockholder Number of Shares
--------------------------------------------------------------------
Jared Shaw and Candice Shaw 33,334 shares
Northbar Capital 16,666 shares
Camille Henry 16,666 shares
Luca Minna 16,666 shares
Professional Traders Fund 133,334 shares
David Fisher 33,334 shares
William Ballay 16,666 shares
Wexford Clearing c/f Chuck Mangione IRA 33,334 shares
Gryphon Master Fund, LP 166,666 shares
Henry Robertelli 10,000 shares
Generic Trading Of Philadelphia, LLC 33,334 shares
Rock II, LLC 80,000 shares
Spectra Capital Management, LLC 133,334 shares
Otape Investments, LLC 66,666 shares
SRG Capital, LLC 133,334 shares
Mark M. Mathes and Teri Mathes 100,000 shares
Robert Gayner 133,334 shares
CAMMAD 66,666 shares
John Wykoff 133,334 shares
David Wykoff 133,334 shares
Dutchess Advisors, LLC 200,000 shares
Dutchess Private Equities Fund, LP 200,000 shares
Michael Cummings 100,000 shares
Marketbyte, LLC 125,000 shares
C.C.R.I Corp. 100,000 shares
Eclips Ventures International 50,000 shares
Michael Hamblett 600 shares
Anthony Spatacco 300 shares
Starboard Capital Markets, LLC 300 shares
Corpfin 24,116 shares

Total common stock being registered 2,290,318 shares

The shares held by Jared Shaw and Candice Shaw, Northbar Capital, Camille Henry,
Luca Minna, Professional Traders Fund, David Fisher, William Ballay, Wexford
Clearing c/f Chuck Mangione IRA, Gryphon Master Fund, LP, Henry Robertelli,
Generic Trading Of Philadelphia, LLC, Rock II, LLC, Spectra Capital Management,
LLC, Otape Investments, LLC, SRG Capital, LLC, Mark M. Mathes and Teri Mathes,
Robert Gayner, CAMMAD, John Wykoff, David Wykoff and Dutchess Private Equities
Fund were issued by us in prior private placements. The shares held by Dutchess
Advisors, Marketbyte and Eclips Ventures International were issued by us
pursuant to consulting agreements. C.C.R.I , Michael Hamblett, Anthony Spatacco,
Starboard Capital Markets, LLC and Corpfin may acquire shares upon the exercise
of warrants. The shares held by Michael Cummings were issued by us in the
acquisition of Network Installation Corporation.

THE OFFERING

Common stock offered 2,290,318 shares

Use of proceeds We will not receive any proceeds
from the sale by the selling stockholders of
our common stock. We will receive proceeds
from the exercise of warrants by certain
shareholders and by C.C.R.I. See
"Use of Proceeds."

Symbol for our common stock Our common stock trades on the
OTCBB Market under the symbol
"NWIS.OB"

OUR CAPITAL STRUCTURE AND SHARES ELIGIBLE FOR FUTURE SALE

Shares of common stock outstanding as of July 20, 2004 11,580,745
(1)

Shares of common stock potentially issuable to C.C.R.I.
upon exercise of the warrants 100,000

Shares of common stock potentially issuable to certain
selling shareholders upon the exercise of warrants 770,317
------------

Total 12,451,062
____________________
(1) Assumes no exercise of:

- Convertible debentures of $25,000 issued to John Wykoff on April 7, 2003.
The convertible debentures have an interest rate of 6% per annum, due on
April 7, 2008. The holder is entitled to convert the face amount of this
debenture, plus accrued interest anytime at the lesser of (i) 75% of the
lowest closing bid price during the fifteen trading days prior to the
conversion date or (ii) 100% of the average of the closing bid prices for
the twenty trading days immediately preceding the closing date of the
transaction.

- Convertible debentures of $75,000 issued to eFund Capital and $65,000
issued to Ashford Capital LLC on April 7, 2003. The holders of these
debentures are entitled to convert the face amount of the debentures, plus
accrued interest into common stock at the lesser of (i) 75% of the lowest
closing bid price during the 15 trading days prior to the conversion date
or (ii) 100% of the average of the closing bid prices for the 20 trading
days immediately preceding the closing date. The convertible debentures pay
6% cumulative interest, in cash or in shares of common stock, at our
option, at the time of each conversion. The debentures are payable on April
8, 2008.

- Convertible debentures of $40,000 issued to Dutchess Private Equities Fund
on April 10, 2003. The convertible debentures convert into common stock at
the lesser of (i) 75% of the lowest closing bid price during the fifteen
trading days prior to the Conversion Date or (ii) 100% of the average of
the closing bid prices for the twenty trading days immediately preceding
the closing date of the Transaction.

- Convertible debentures of $15,000 issued to Dutchess Private Equities Fund
on May 5, 2003. The convertible debentures convert into common stock at the
lesser of (i) 75% of the lowest closing bid price during the fifteen
trading days prior to the conversion date or (ii) 100% of the average of
the closing bid prices for the twenty trading days immediately preceding
the closing date of the transaction.

- Convertible debentures of $25,000 issued to Dutchess Private Equities Fund
on May 26, 2003. The convertible debentures convert into common stock at
the lesser of (i) 75% of the lowest closing bid price during the fifteen
trading days prior to the conversion date or (ii) 100% of the average of
the closing bid prices for the twenty trading days immediately preceding
the closing date of the transaction.

- Convertible debentures of $25,000 issued to Dutchess Private Equities Fund
on June 16, 2003. The convertible debentures convert into common stock at
the lesser of (i) 75% of the lowest closing bid price during the fifteen
trading days prior to the conversion date or (ii) 100% of the average of
the closing bid prices for the twenty trading days immediately preceding
the closing date of the transaction.

- Convertible debentures of $15,000 issued to Dutchess Private Equities Fund
on July 22, 2003. The convertible debentures convert into common stock at
the lesser of (i) 75% of the lowest closing bid price during the fifteen
trading days prior to the conversion date or (ii) 100% of the average of
the closing bid prices for the twenty trading days immediately preceding
the closing date of the transaction.

- Convertible debentures of $95,000 issued to Dutchess Private Equities Fund
on July 28, 2003. The convertible debentures convert into common stock at
the lesser of (i) 75% of the lowest closing bid price during the fifteen
trading days prior to the conversion date or (ii) 100% of the average of
the closing bid prices for the twenty trading days immediately preceding
the closing date of the transaction.

- Convertible debentures of $20,000 issued to Dutchess Private Equities Fund
on August 13, 2003. The debentures convert into common stock at the lesser
of (i) 75% of the lowest closing bid price during the fifteen trading days
prior to the conversion date or (ii) 100% of the average of the closing bid
prices for the twenty trading days immediately preceding the closing date
of the transaction.

- Convertible debentures of $28,000 issued to Dutchess Private Equities Fund
on September 10, 2003. The debentures convert into common stock at the
lesser of (i) 75% of the lowest closing bid price during the fifteen
trading days prior to the conversion date or (ii) 100% of the average of
the closing bid prices for the twenty trading days immediately preceding
the closing date of the transaction.

- Convertible debentures of $75,000 issued to Dutchess Private Equities Fund
on October 5, 2003. The debentures convert into common stock at the lesser
of (i) 75% of the lowest closing bid price during the fifteen trading days
prior to the conversion date or (ii) 100% of the average of the closing bid
prices for the twenty trading days immediately preceding the closing date
of the transaction.

- Convertible debentures of $260,000 issued to Dutchess Private Equities Fund
on February 27, 2004. The holder of the debentures is entitled to convert
the face amount of the debentures, plus accrued interest into common stock
at the lesser of (i) 75% of the lowest closing bid price during the 15
trading days prior to the conversion date or (ii) 100% of the average of
the closing bid prices for the 20 trading days immediately preceding the
closing date. The convertible debentures pay 6% cumulative interest, in
cash or in shares of common stock, at Dutchess' option at the time of each
conversion. The debentures are payable on February 27, 2009

- Convertible debentures of $155,500 issued to Dutchess Private Equities Fund
on March 1, 2004. The holder of the debentures is entitled to convert the
face amount of the debentures, plus accrued interest into common stock at
the lesser of (i) 75% of the lowest closing bid price during the 15 trading
days prior to the conversion date or (ii) 100% of the lowest bid prices for
the 20 trading days immediately preceding the closing date. The convertible
debentures shall pay 6% cumulative interest, in cash or in shares of common
stock, at our option, at the time of each conversion. The debentures are
payable on March 1, 2008.

- Convertible debentures of $155,000 issued to Dutchess Private Equities
Fund, II, on was contracted on March 31, 2004 but funded on April 1, 2004.
The holder of the debentures is entitled to convert the face amount of
these debentures, plus accrued interest into common stock at the lesser of
(i) 75% of the lowest closing bid price during the 15 trading days prior to
the conversion date or (ii) 100% of the average of the closing bid prices
for the 20 trading days immediately preceding the closing date. The
convertible debentures pay 6% cumulative interest, in cash or in shares of
common stock, at our option, at the time of each conversion. The debentures
are payable on March 31, 2008.

- Convertible debentures of $50,000 issued to Dutchess Private Equities Fund,
II, on April 4, 2004. The holder of the debentures is entitled to convert
the face amount of these debentures, plus accrued interest into common
stock at the lesser of (i) 75% of the lowest closing bid price during the
15 trading days prior to the conversion date or (ii) 100% of the average of
the closing bid prices for the 20 trading days immediately preceding the
closing date. The convertible debentures pay 8% cumulative interest, in
cash or in shares of common stock, at our option, at the time of each
conversion. The debentures are payable on April 4, 2009. As of July 20,
2004, the convertible debenture has been repaid in the amount of $40,000.

RISK FACTORS

An investment in our common stock involves a high degree of risk. You should
carefully consider the following risk factors, other information included in
this prospectus and information in our periodic reports filed with the SEC. If
any of the following risks actually occur, our business, financial condition or
results of operations could be materially and adversely affected, and you may
lose some or all of your investment.

RISKS ABOUT OUR BUSINESS

THE INDEPENDENT ACCOUNTANTS OPINION ON THE FINANCIAL STATEMENTS FOR THE YEAR
ENDED DECEMBER 31, 2003 INCLUDES AN EXPLANATORY PARAGRAPH ON THE COMPANY'S
ABILITIES TO CONTINUE AS A GOING CONCERN AND IF WE CANNOT OBTAIN ADDITIONAL
FINANCING, WE MAY HAVE TO CURTAIL OPERATIONS AND MAY ULTIMATELY CEASE
TO EXIST.

Our audited financial statements for the fiscal year ended December 31, 2003,
reflect a net loss of $3,434,607. These conditions raised substantial doubt
about our ability to continue as a going concern. The independent auditor's
report for the year ended December 31, 2003 includes an explanatory paragraph to
their audit opinion stating that our recurring losses from operations and
accumulated deficit raise substantial doubt about the company's ability to
continue as a going concern. The company's continued operations are contingent
on its ability to raise additional capital and obtain financing and success in
its future operations. If we do not acquire sufficient additional funding or
alternative sources of capital to meet our working capital, we may have to
substantially curtail our operations and business plan. To meet our future
obligations, from time to time, we intend to issue shares of common stock or
issue convertible debenture in private placements.

WE HAVE SUBSTANTIAL INDEBTEDNESS WHICH MAY AFFECT OUR ABILITY TO MAINTAIN OR
GROW OUR OPERATIONS.

As of March 31, 2004, we had $1,959,024 in current liabilities. As a result of
our level of debt and the terms of our debt instruments:
- our vulnerability to adverse general economic conditions is heightened;
- we will be required to dedicate a substantial portion of our cash flow from
operations to repayment of debt, limiting the availability of cash for
other purposes;
- we are and will continue to be limited by financial and other restrictive
covenants in our ability to borrow additional funds, consummate asset
sales, enter into transactions with affiliates or conduct mergers and
acquisitions;
- our flexibility in planning for, or reacting to, changes in our business
and industry will be limited; and
- our ability to obtain additional financing in the future for working
capital, capital expenditures, acquisitions, general corporate purposes or
other purposes may be impaired.

Our ability to pay principal and interest on our indebtedness and to satisfy our
other debt obligations will partly depend upon our future operating performance,
which will be affected by prevailing economic conditions and financial, business
and other factors, some of which are beyond our control. If we are unable to
service our indebtedness, we will be forced to take actions such as reducing or
delaying capital expenditures, selling assets, restructuring or refinancing our
indebtedness, or seeking additional equity capital. We may not be able to affect
any of these remedies on satisfactory terms, or at all.

OUR OPERATING RESULTS WILL FLUCTUATE SIGNIFICANTLY FOR THE FORESEEABLE FUTURE,
WHICH MAY AFFECT OUR STOCK PRICE.

Our quarterly results of operations have varied in the past and are likely to
continue to vary significantly from quarter to quarter. Our operating expenses
are based on expected future revenues and are relatively fixed in the short
term. If our revenues are lower than expected, our results of operations could
be adversely affected. Additionally, we are unable to forecast our future
revenues with certainty because our business plan contemplates the acquisition
of new enterprises. Many factors can cause our financial results to fluctuate,
some of which are outside of our control. Quarter-to-quarter comparisons of our
operating results may not be meaningful and you should not rely upon them as an
indication of our future performance. In addition, during certain future periods
our operating results likely will fall below the expectations of public market
analysts and investors. In this event, the market price of our common stock
likely would decline.

WE NEED ADDITIONAL CAPITAL TO GROW OUR BUSINESS AND WE MAY NOT BE ABLE TO FIND
SUCH CAPITAL ON ACCEPTABLE TERMS.

Our business plan contemplates the acquisition of new enterprises and the
proceeds from our existing financing arrangements may not be sufficient to fully
implement our business plan. Additionally, we may not be able to generate
sufficient revenues from our existing operations to fund our capital
requirements. Accordingly, we may require additional funds to enable us to
operate profitably. Such financing may not be available on terms acceptable to
us. We currently have no bank borrowings or credit facilities, and we may not be
able to arrange any debt financing. Additionally, we may not be able to
successfully consummate additional offerings of stock or other securities in
order to meet our future capital requirements. If we cannot raise additional
capital through issuing stock or bank borrowings, we may not be able to grow our
business.

OUR BUSINESS STRATEGY INCLUDES IDENTIFYING NEW BUSINESSES TO ACQUIRE, AND IF WE
CANNOT INTEGRATE ACQUISITIONS INTO OUR COMPANY SUCCESSFULLY, WE MAY NOT BECOME
PROFITABLE.

Our success partially depends upon our ability to identify and acquire
undervalued businesses. Although we believe that there are companies available
for potential acquisition that are undervalued and might offer attractive
business opportunities, we may not be able to make any acquisitions, and if we
do make acquisitions, they may not be profitable.

WE DEPEND ON OUR KEY PERSONNEL AND IF THOSE PERSONNEL LEAVE THE COMPANY, OUR
BUSINESS MAY BE HARMED.

At this time, we are almost totally dependent upon Michael Cummings and Robert
Barnett as our only operating officers and on the directors of Network
Installation Corporation, our only business asset that is producing significant
revenues. While we have employment agreements with Mr. Cummings and Mr. Barnett,
it does not obligate him to remain as our Chief Executive Officer. We do not
maintain insurance on the lives of our officers, directors or key employees. The
loss of their services would have a material adverse effect on our business. We
elect our directors each year and while we expect to reelect our directors
currently on the Board, our directors are not obligated to continue in their
positions.

SOME OF OUR POTENTIAL FUTURE GROWTH DEPENDS ON INCREASING CUSTOMER ACCEPTANCE OF
WIRELESS NETWORKS, AND TO THE EXTENT THAT SUCH ACCEPTANCE FAILS TO INCREASE, WE
MAY NOT GROW OUR BUSINESS.

While the majority of our revenues are currently derived from the installation
of cable systems, we believe that improving wireless technology will eventually
make wireless systems an acceptable alternative to many of our potential
customers. We have begun to enter the wireless marketplace and believe this
technology could lead to future growth for our company. The wireless industry
has historically experienced a dramatic rate of growth both in the United States
and internationally. If the rate of growth should slow down and end users
continue to reduce their capital investments in wireless infrastructure or fail
to expand their networks, we may not be able to expand our business.

OUR INDUSTRY HAS RAPIDLY CHANGING TECHNOLOGY AND, IF WE DO NOT STAY CURRENT, WE
MAY LOSE CUSTOMERS AND OUR BUSINESS WILL BE HARMED.

The network installation industry and related technology business involve a
broad range of rapidly changing technologies. Our technologies may not remain
competitive over time, and others may develop technologies that are superior to
ours which may render our products non-competitive. Our business may depend on
trade secrets, know-how, continuing innovations and licensing opportunities to
develop and maintain our competitive position. Others may independently develop
equivalent proprietary information or otherwise gain access to or disclose our
information. Our confidentiality agreements on which we rely may not provide
meaningful protection of any trade secrets on which we may depend for success,
or provide adequate remedies in the event of unauthorized use or disclosure of
confidential information or prevent our trade secrets from otherwise becoming
known to or independently discovered by our competitors.

RISKS ABOUT OUR STOCK AND THIS OFFERING CERTAIN INSIDERS HAVE ENOUGH SHARES TO
EXERCISE CONTROL OVER MATTERS SUBJECT TO INVESTOR VOTE, WHICH COULD ADVERSELY
AFFECT OUR STOCK PRICE.

As of July 20, 2004, officers and directors controlled 73.14% of our common
stock and therefore control the election of directors and all other matters
subject to stockholder votes. This concentration of ownership may also have the
effect of delaying or preventing a change of control, even if this change of
control would benefit certain shareholders. These shareholders may make
decisions that may not be in the best interest of minority stockholders. As a
result, this concentration of ownership could have an adverse effect on the
market price of our common stock.

OUR STOCK PRICE IS VOLATILE AND YOU MAY NOT BE ABLE TO SELL YOUR SHARES AT A
PRICE HIGHER THAN WHAT YOU PAID.

The market for our common stock is highly volatile. The trading price of our
common stock could be subject to wide fluctuations in response to, among other
things, quarterly variations in operating and financial results, announcements
of technological innovations or new products by our competitors or us, changes
in prices of our products and services or our competitors' products and
services, changes in product mix, changes in our revenue and revenue growth
rates.

WE MUST COMPLY WITH PENNY STOCK REGULATIONS WHICH COULD EFFECT THE LIQUIDITY AND
PRICE OF OUR STOCK.

The SEC has adopted rules that regulate broker-dealer practices in connection
with transactions in "penny stocks." Penny stocks generally are equity
securities with a price of less than $5.00, other than securities registered on
certain national securities exchanges or quoted on NASDAQ, provided that current
price and volume information with respect to transactions in such securities is
provided by the exchange or system. Prior to a transaction in a penny stock, a
broker-dealer is required to:

- Deliver a standardized risk disclosure document prepared by the SEC;
- Provide the customer with current bid and offers quotations for the penny
stock;
- Explain the compensation of the broker-dealer and its salesperson in the
transaction;
- Provide monthly account statements showing the market value of each penny
stock held in the customer's account;
- Make a special written determination that the penny stock is a suitable
investment for the purchaser and receives the purchaser's executed
acknowledgement of the same; and
- Provide a written agreement to the transaction.

These requirements may have the effect of reducing the level of trading activity
in the secondary market for our stock. Because our shares are subject to the
penny stock rules, you may find it more difficult to sell your shares.

RISKS ABOUT OUR INDUSTRY

OUR INDUSTRY HAS RAPIDLY CHANGING TECHNOLOGY AND, IF WE DO NOT STAY CURRENT, WE
MAY LOSE CUSTOMERS AND OUR BUSINESS WILL BE HARMED.

USE OF PROCEEDS

1,420,001 shares of common stock covered by this prospectus are to be sold by 29
selling shareholders who will receive all of the proceeds from such sales. We
will not receive any proceeds from the sale of the 1,420,001 shares. However, we
may receive proceeds from the sale of 100,000 common shares to C.C.R.I. if
C.C.R.I. exercises warrants that it currently holds. The warrants held by
C.C.R.I. can be exercised at either $5.00 or $7.50 and expire in September 2008.
Additionally, 24 of our selling shareholders hold a total of 770,317 warrants.
Each warrant allows the holder to purchase one share of our common stock at an
exercise price of $5.00. The warrants expire in May 2009. However, we do not
believe C.C.R.I. or the other selling shareholders will exercise the warrants in
the near future because the exercise prices of $5.00 and $7.50 are higher than
the current trading price of our stock. On July 23, 2004, the last trading
price of our common stock was $3.00.

DETERMINATION OF OFFERING PRICE

The selling stockholders may sell shares in any manner at the current market
price or through negotiated transactions with any person at any price.

SELLING SECURITY HOLDERS

Based upon information available to us as of July 20, 2004, the following table
sets forth the name of the selling stockholders, the number of shares owned, the
number of shares registered by this prospectus and the number and percent of
outstanding shares that the selling stockholders will own after the sale of the
registered shares, assuming all of the shares are sold. The information provided
in the table and discussions below has been obtained from the selling
stockholders. The selling stockholders may have sold, transferred or otherwise
disposed of, or may sell, transfer or otherwise dispose of, at any time or from
time to time since the date on which they provided the information regarding the
shares beneficially owned, all or a portion of the shares of common stock
beneficially owned in transactions exempt from the registration requirements of
the Securities Act of 1933. As used in this prospectus, "selling stockholder"
includes donees, pledgees, transferees or other successors-in-interest selling
shares received from the named selling stockholder as a gift, pledge,
distribution or other non-sale related transfer.

Beneficial ownership is determined in accordance with Rule 13d-3(d) promulgated
by the Commission under the Securities Exchange Act of 1934. Unless otherwise
noted, each person or group identified possesses sole voting and investment
power with respect to the shares, subject to community property laws where
applicable.

Ownership Before Offering Shares Being Offered Ownership Percentage Ownership
After Offering(1) After Offering (1)(2)
------------------------- -------------------- --------------------- ---------------------
Jared Shaw and Candice Shaw 0 33,334 0 *
Northbar Capital (3) 0 16,666 0 *
Camille Henry 0 16,666 0 *
Luca Minna 0 16,666 0 *
Professional Traders Fund (4) 0 133,334 0 *
David Fisher 0 33,334 0 *
William Ballay 0 16,666 0 *
Wexford Clearing c/f
Chuck Mangione IRA 0 33,334 0 *
Gryphon Master Fund, LP 0 166,666 0 *
Henry Robertelli 0 10,000 0 *
Generic Trading Of
Philadelphia, LLC 0 33,334 0 *
Rock II, LLC 0 80,000 0 *
Spectra Capital Management, LLC 0 133,334 0 *
Otape Investments, LLC 0 66,666 0 *
SRG Capital, LLC 0 133,334 0 *
Mark M. Mathes and Teri Mathes 0 100,000 0 *
Robert Gayner 0 133,334 0 *
CAMMAD (5) 0 66,666 0 *
John Wykoff 8,000 133,334 8,000 *
David Wykoff 0 133,334 0 *
Dutchess Advisors, LLC (6) 700,000 200,000 500,000 4.3%
Dutchess Private Equities
Fund, LP (6) 2,350,000 200,000 2,150,000 18.6%
Michael Cummings, CEO 5,380,000 100,000 5,280,000 45.6%
Marketbyte, LLC (7) 250,000 125,000 125,000 1.0%
C.C.R.I Corp. (8) 0 100,000 0 *
Eclips Ventures International 50,000 50,000 0 *
Michael Hamblett 0 600 0 *
Anthony Spatacco 0 300 0 *
Starboard Capital Markets, LLC 0 300 0 *
Corpfin 0 24,116 0 *

(1) The numbers assume that the selling stockholders have sold all of the
shares offered hereby prior to completion of this Offering.
(2) Based on 11,580,745 shares outstanding as of July 20, 2004.
(3) The principles of Northbar Capital are Stephen Schwartz and Jared Shaw.
(4) The principle of Professional Traders Fund is Howard Berger.
(5) The principle of CAMMAD is Geoffrey MacDonald.
(6) Two of our directors, Michael Novielli and Douglas Leighton, are the
Managing Members of Dutchess Capital Management, LLC which is the General
Partner of Dutchess Private Equities Fund, LP. Our director, Theodore Smith, is the
Executive Vice President of Dutchess Advisors, LLC.
(7) The Managing Member of Marketbyte, LLC is Larry Isen. We have entered into a
consulting agreement with them.
(8) The President of C.C.R.I. Corp. is Malcolm McGuire.

PLAN OF DISTRIBUTION

The selling stockholders will act independently of us in making decisions with
respect to the timing, manner and size of each sale. The selling stockholders
may sell the shares from time to time:

- in transactions on the Over-the-Counter Bulletin Board or on any national
securities exchange or U.S. inter-dealer system of a registered national
securities association on which our common stock may be listed or quoted at
the time of sale; or
- in private transactions and transactions otherwise than on these exchanges
or systems or in the over-the-counter market;
- at prices related to such prevailing market prices; or
- in negotiated transactions;or
- in a combination of such methods of sale; or
- any other method permitted by law.

The selling stockholders may be deemed underwriters. The selling stockholders
may effect such transactions by offering and selling the shares directly to or
through securities broker-dealers, and such broker-dealers may receive
compensation in the form of discounts, concessions or commissions from the
selling stockholders and/or the purchasers of the shares for whom such
broker-dealers may act as agent or to whom the selling stockholders may sell as
principal, or both, which compensation as to a particular broker-dealer might be
in excess of customary commissions.

On or prior to the effectiveness of the registration statement to which this
prospectus is a part, we will advise the selling stockholders that they and any
securities broker-dealers or others who may be deemed to be statutory
underwriters will be governed by the prospectus delivery requirements under the
Securities Act. Under applicable rules and regulations under the Securities
Exchange Act, any person engaged in a distribution of any of the shares may not
simultaneously engage in market activities with respect to the common stock for
the applicable period under Regulation M prior to the commencement of such
distribution. In addition and without limiting the foregoing, the selling
security owners will be governed by the applicable provisions of the Securities
and Exchange Act, and the rules and regulations thereunder, including without
limitation Rules 10b-5 and Regulation M, which provisions may limit the timing
of purchases and sales of any of the shares by the selling stockholders. All of
the foregoing may affect the marketability of our securities.

On or prior to the effectiveness of the registration statement to which this
prospectus is a part, we will advise the selling stockholders that the
anti-manipulation rules under the Securities Exchange Act may apply to sales of
shares in the market and to the activities of the selling security owners and
any of their affiliates. We have informed the selling stockholders that they may
not:
- engage in any stabilization activity in connection with any of the shares;
- bid for or purchase any of the shares or any rights to acquire the shares;
- attempt to induce any person to purchase any of the shares or rights to
acquire the shares other than as permitted under the Securities Exchange
Act; or
- effect any sale or distribution of the shares until after the prospectus
shall have been appropriately amended or supplemented;
- if required, to describe the terms of the sale or distribution.

We have informed the selling stockholders that they must affect all sales of
shares in broker's transactions, through broker-dealers acting as agents, in
transactions directly with market makers, or in privately negotiated
transactions where no broker or other third party, other than the purchaser, is
involved.

The selling stockholders may indemnify any broker-dealer that participates in
transactions involving the sale of the shares against certain liabilities,
including liabilities arising under the Securities Act. Any commissions paid or
any discounts or concessions allowed to any broker-dealers, and any profits
received on the resale of shares, may be deemed to be underwriting discounts and
commissions under the Securities Act if the broker-dealers purchase shares as
principal.

In the absence of the registration statement to which this prospectus is a part,
certain of the selling stockholders would be able to sell their shares only
pursuant to the limitations of Rule 144 promulgated under the Securities Act.
We expect to incur approximately $25,000 in expenses related to this
registration statement. Our expenses consist mainly of accounting and legal
fees.

LEGAL PROCEEDINGS

On April 25, 2003, the Superior Court of the State of California, County of
Orange, entered a judgment in the amount of $46,120 against us and our former
management in favor of Insulectro Corp., a vendor of our former subsidiary,
North Texas Circuit Board. We believe that we were never issued proper service
of process for the complaint. In addition, on August 20, 2002, we sold North
Texas Circuit Board to BC Electronics Inc. Pursuant to terms of the share
purchase agreement, BC Electronics assumes all liabilities of North Texas
Circuit Board. In December 2003, we filed a motion to vacate the judgment for
lack of personal service. In February 2004, the Court ruled in our favor and the
judgment was vacated. Although we were the guarantor on the loan, North Texas
Circuit Board is the principal debtor and (i) we will bring action against North
Texas Circuit Board to seek relief or (ii) because partial payment was made by
North Texas Circuit Board, it could affect the legal status of the guarantee,
which we believe may absolve us of liability. In February 2004, the plaintiff
re-filed the complaint. Although we will continue to oppose the action we have
begun settlement discussions with the plaintiff.

On April 29, 2003, Arman Moheban brought a suit against us and our former
management in the Superior Court of the State of California, County of Los
Angeles, alleging breach of contract pursuant to a settlement agreement dated
November 20, 2002. The suit alleges that we are delinquent in our repayment of a
$20,000 promissory note, of which $5,000 has been repaid to date. We reached a
settlement with the plaintiff for $22,400 to be paid in four equal monthly
installments of $5,600 beginning July 1, 2004. As of July 20, we have made one
payment of $5,600.

In the year ended December 31, 2002, a suit was brought against us and our
former management in the Superior Court of the State of California, County of
San Francisco, by Arman Moheban alleging that we made false written and oral
representations to induce the plaintiff to invest in us and that such investment
occurred despite the plaintiff's request that the funds be held in a brokerage
account maintained by a related entity. A co-defendant, an individual in the
case also filed a cross-complaint in the action alleging theories of recovery
against us and several other defendants and alleging fraud, breach of contract,
misrepresentation, conversion and securities fraud against us. On November 21,
2003, we reached a settlement with the plaintiffs for $160,000. As an amendment
to the settlement agreement, we agreed to pay an additional $5,000. We have made
all payments and fulfilled our obligation pursuant to the settlement agreement.
We had accrued $300,000 in the financials statements at December 31, 2003
against any possible outcome.

We may be involved in litigation, negotiation and settlement matters that may
occur in our day-to-day operations. Management does not believe implication of
this litigation will have any other material impact on our financial statements
or business.

DIRECTORS, EXECUTIVE OFFICERS, SIGNFICANT EMPLOYEES AND CONTROL PERSONS

The names and ages of all of our directors and executive officers, along with
their respective positions, term of office and period such position(s) was held,
is as follows:

name Age Position Held
----- --- --------------

Michael Cummings 39 Chief Executive Officer, Director

Michael A. Novielli 39 Chairman of the Board of Directors

Douglas H. Leighton 35 Director

Theodore J. Smith 27 Director

Robert Barnett 44 Vice President of Sales and Marketing

BIOGRAPHIES OF OFFICERS, DIRECTORS AND SIGNIFICANT EMPLOYEES

Set forth below is a brief description of the background of our officers and
directors based on information provided by them to us.

MICHAEL CUMMINGS has served as our Chief Executive Officer and director since
May 2003. He previously founded and served as President of Network Installation
Corp. from 1997 to 2003. During the period from 1999-2001, Mr. Cummings
purchased a controlling interest in Tri-City Datatel, Inc., a designer and
installer of networking systems. Mr. Cummings sold his interest in 2001. In
1983, Mr. Cummings attended Goldenwest College for Business Law.

MICHAEL A. NOVIELLI has served as our director since April, 2003. Mr. Novielli
is a Managing Partner of Dutchess Capital Management, LLC and Dutchess Advisors,
LLC. A co-founder of Dutchess in 1996, Mr. Novielli advises the senior
management of issuers in which Dutchess Private Equities Fund, LP has invested,
in areas of business development, legal, accounting and regulatory compliance.
Prior to co-founding Dutchess, Mr. Novielli was a partner at Scharff, Witchel &
Company, a 40 year-old, full service investor relations firm, where he consulted
with publicly-traded companies on areas of finance and business development.
Prior to joining Scharff, Mr. Novielli was Vice-President of Institutional
Sales-Private Placements at Merit Capital Associates, an independent NASD
registered broker-dealer. Before joining Merit, Mr. Novielli began his
investment career at PaineWebber, where he served for approximately three years
as a registered representative servicing high net worth individuals and
institutional clientele. He is also a member on the Board of Directors of
NeWave, Inc. and Xtreme Companies, Inc.

DOUGLAS LEIGHTON has served as our director since April, 2003. Mr. Leighton is a
Managing Partner of Dutchess Capital Management, LLC and Dutchess Advisors, LLC.
A co-founder of Dutchess in 1996, Mr. Leighton oversees trading and portfolio
risk management of investments made on behalf of Dutchess Private Equities Fund
LP. Prior to co-founding Dutchess, Mr. Leighton was founder and president of
Boston-based Beacon Capital from 1990-1996, which engaged in money management.
Mr. Leighton holds a BS/BA in Economics & Finance from the University of
Hartford. He is also a member on the Board of Directors of NeWave, Inc. and
Xtreme Companies, Inc.

THEODORE J. SMITH has served as our director since April 2003. Mr. Smith serves
as Executive Vice President of Dutchess Advisors LLC, whom he joined in 1998 and
is a liaison between Dutchess Capital Management, LLC on behalf of Dutchess
Private Equities Fund, LP and senior management of companies in the Fund's
portfolio. Prior to joining Dutchess in 1998, Mr. Smith was a principal at
Geneva Atlantic Capital, LLC where he focused on assisting corporate clients
with SEC compliance matters, business plan preparation and presentation and
capital markets financing. Mr. Smith received his BS in Finance and Marketing
from Boston College. Mr. Smith has also served as a director of several public
as well as private companies. He is also a member on the Board of Directors of
NeWave, Inc. and Xtreme Companies, Inc.

ROBERT BARNETT has served as our Vice President of Sales and Marketing since
January 2004. Prior to joining us and since February 2002, Mr. Barnett was the
Vice President of Sales for Addonics Technologies, Inc. From April 2001 through
February 2002, Mr. Barnett was the Vice President of Sales and Marketing for
FollowMedia Wireless, Inc. From July 1993 through March 2001, Mr. Barnett was
the Vice President of Sales and Marketing. Mr. Barnett has a BS in Marketing &
Management from Boise State University.

BOARD OF DIRECTORS

We currently have four members of our Board of Directors, who are elected to
annual terms and until their successors are elected and qualified. Executive
officers are appointed by the Board of Directors on an annual basis and serve
until their successors have been duly elected and qualified. There are no
family relationships among any of our directors, officers or key employees.

AUDIT COMMITTEE

We do not have a separate Audit Committee. Our full Board of Directors performs
the functions usually designated to an Audit Committee. Mr. Novielli, the
Chairman of the Board of Directors, qualifies as an "audit committee
financial expert" under the rules of the Securities and Exchange
Commission.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth, to our knowledge, certain information concerning
the beneficial ownership of our common stock as of July 20, 2004 by each
stockholder known by us to be (i) the beneficial owner of more than 5% of the
outstanding shares of common stock, (ii) each current director, (iii) each of
the executive officers named in the Summary Compensation Table who were serving
as executive officers at the end of the 2003 fiscal year and (iv) all of our
directors and current executive officers as a group.

Unless otherwise indicated below, to our knowledge, all persons listed below
have sole voting and investment power with respect to their shares of common
stock except to the extent that authority is shared by spouses under applicable
law.

NAME AND ADDRESS COMMON SHARES PERCENTAGE
OF BENEFICIAL OWNER (1) BENEFICIALLY OWNED OWNED OF CLASS(2)

Michael A. Novielli . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,050,000(3) 26.33%
Douglas Leighton. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,050,000(3) 26.33%
Michael Cummings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,380,000 46.46%
Theodore Smith . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 0%
Dutchess Private Equities Fund, LP 312 Stuart Street, 3rd Floor, Boston, MA 02116. 2,350,000 (3) 20.29%
Dutchess Advisors, LLC, 312 Stuart Street, 3rd Floor, Boston, MA 02116 . . . . . 700,000 (3) 6.04%
All directors and current executive officers as a group (4 Persons) . . . . . . . 8,470,000 73.14%

(1) The address of all individual directors and executive officers is c/o Network Installation Corporation, 18
Technology Drive, Suite 140A, Irvine, CA 92618.

(2) The number of shares of common stock issued and outstanding on July 20, 2004 was 11,580,745 shares. The
calculation of percentage ownership for each listed beneficial owner is based upon the number of shares of
common stock issued and outstanding on July 20, 2004, plus shares of common stock subject to options held by
such person on July 20, 2004 and exercisable within 60 days thereafter.

(3) Two of our directors, Michael Novielli and Douglas Leighton, are the principals of Dutchess Advisors, LLC.
Messrs. Novielli and Leighton are also the principals of Dutchess Capital Management, LLC, which is the general
partner to Dutchess Private Equities Fund, LP. Our director, Theodore Smith, is the Executive Vice President of
Dutchess Advisors, LLC. Dutchess Advisors owns 700,000 shares of our common stock. Dutchess Private Equities
Fund owns 2,350,000 shares of our common stock. Messrs. Novielli and Leighton share voting and dispositive power
over the shares of our common stock held by Dutchess Advisors and Dutchess Private Equities Fund.

DESCRIPTION OF SECURITIES
COMMON STOCK

Our Articles of Incorporation authorize us to issue 100,000,000 shares of
common stock, par value $.001 per share.

VOTING RIGHTS. Each share of our common stock entitles the holder thereof to one
vote, either in person or by proxy, at meetings of stockholders. Our Board of
Directors is elected annually at each annual meeting of the stockholders.
Stockholders are not permitted to vote their shares cumulatively. Accordingly,
the holders of more than 50% of the voting power can elect all of our directors.

DIVIDEND POLICY. All shares of common stock are entitled to participate ratably
in dividends when, as and if declared, by our Board of Directors, out of the
funds legally available therefore. Any such dividends may be paid in cash,
property or additional shares of common stock. We have not paid any dividends
since inception and presently anticipate that all earnings, if any, will be
retained for development of our business. We expect that no dividends on the
shares of common stock will be declared in the foreseeable future. Any future
dividends will be subject to the discretion of our Board of Directors and will
depend upon, among other things, our future earnings, operating and financial
condition, capital requirements, general business conditions and other pertinent
facts. We may never pay dividends on our common stock.

MISCELLANEOUS RIGHTS AND PROVISIONS. Holders of common stock have no preemptive
or other subscriptions rights, conversions rights, and redemption or sinking
fund provisions. In the event of the liquidation or dissolution, whether
voluntary or involuntary, of Network Installation, each share of common stock is
entitled to share ratably in any assets available for distribution to holders of
the equity of Network Installation after satisfaction of all liabilities.

INTEREST OF NAMED EXPERTS AND COUNSEL

No expert or counsel within the meaning of those terms under Item 509 of
Regulation S-B will receive a direct or indirect interest in the small business
issuer or was a promoter, underwriter, voting trustee, director, officer, or
employee of Network Installation. Nor does any such expert have any contingent
based agreement with us or any other interest in or connection to us.

DISCLOSURE OF COMMISSION POSITION OF INDEMNIFICATION FOR SECURITIES ACT
LIABILITIES

Article VI of our By-laws provides: Except as hereinafter stated otherwise, the
Corporation shall indemnify all of its officers and directors, past, present and
future, against any and all expenses incurred by them, and each of them
including but not limited to legal fees, judgments and penalties which may be
incurred, rendered or levied in any legal action brought against any or all of
them for or on account of any act or omission alleged to have been committed
while acting within the scope of their duties as officers or directors of this
Corporation.

Under our Certificate of Incorporation and By-Laws, each person who is or was a
director or officer shall be indemnified by us to the full extent permitted or
authorized by the General Corporation Law of Nevada. Under such law, to the
extent that such person is successful on the merits of defense of a suit or
proceeding brought against such person by reason of the fact that such person is
a director or officer of Network Installation, such person shall be indemnified
against expenses, including attorneys' fees, reasonably incurred in connection
with such action. If unsuccessful in defense of a third-party civil suit or a
criminal suit or if such a suit is settled, such a person shall be indemnified
under such law against both (1) expenses (including attorneys' fees) and (2)
judgments, fines and amounts paid in settlement if such person acted in good
faith and in a manner such person reasonably believed to be in, or not opposed
to, our best interests, and with respect to any criminal action, had no
reasonable cause to believe such person's conduct was unlawful.

If unsuccessful in defense of a suit brought by or under the right of Network
Installation, or if such suit is settled, such a person shall be indemnified
under such law only against expenses (including attorneys' fees) incurred in the
defense or settlement of such suit if such person acted in good faith and in a
manner such person reasonably believed to be in, or not opposed to, our best
interests, except that if such a person is adjudicated to be liable in such suit
for negligence or misconduct in the performance of such person's duty to us,
such person cannot be made whole even for expenses unless the court determines
that such person is fairly and reasonably entitled to be indemnified for such
expenses.

As soon as may be practicable, we expect to cover our officers and directors by
officers' and directors' liability insurance in an amount to be determined by
the Board of Directors which will include reimbursement for costs and fees. We
expect to enter into Indemnification Agreements with each of our executive
officers and directors which will provide for reimbursement for all direct and
indirect costs of any type or nature whatsoever (including attorneys' fees and
related disbursements) actually and reasonably incurred in connection with
either the investigation, defense or appeal of a Proceeding, as defined,
including amounts paid in settlement by or on behalf of an Indemnitee.

We have been advised that in the opinion of the Securities and Exchange
Commission, insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to our directors, officers
and controlling persons pursuant to the foregoing provisions, such
indemnification is against public policy as expressed in the Act and is
therefore unenforceable. In the event a claim for indemnification against such
liabilities (other than our payment of expenses incurred or paid by our
director, officer or controlling person in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, we will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements that involve risks and
uncertainties. We generally use words such as "believe," "may," "could," "will,"
"intend," "expect," "anticipate," "plan," and similar expressions to identify
forward-looking statements, including statements regarding our expansion plans.
You should not place undue reliance on these forward-looking statements. Our
actual results could differ materially from those anticipated in the
forward-looking statements for many reasons, including the risks described in
our "Risk Factor" section and elsewhere in this report. Although we believe the
expectations reflected in the forward-looking statements are reasonable, they
relate only to events as of the date on which the statements are made, and our
future results, levels of activity, performance or achievements may not meet
these expectations. We do not intend to update any of the forward-looking
statements after the date of this document to conform these statements to actual
results or to changes in our expectations, except as required by law.

DESCRIPTION OF BUSINESS

HISTORY

We incorporated in the State of Nevada as Color Strategies on March 24, 1998. On
October 1, 1999, we created a wholly-owned subsidiary named Infinite Technology
Holding, Inc. On December 23, 1999, we changed our name to Infinite Technology
Corporation. On May 4, 2000, we changed our name from Infinite Technology
Corporation to Flexxtech Corporation, IncOn July 10, 2003 we changed our name
from Flexxtech Corporation to Network Installation Corp. On the same date, we
changed the name of our wholly-owned subsidiary to Network Installation
Holdings, Inc.

In May of 2000, we acquired Mardock, Inc., a designer, manufacturer and
distributor of apparel and promotional products. In August 2000, we acquired a
majority interest in North Texas Circuit Board Co., or North Texas Circuit
Board, through the acquisition of 67% of the common stock of Primavera
Corporation, the parent company of North Texas Circuit Board, in exchange for
195,000 shares of our common stock, valued at $325,000, plus a contribution of
$1,250,000 in cash to North Texas Circuit Board as additional working capital.
North Texas Circuit Board manufactures high quality printed circuit boards. In
September 2000, we acquired 80% of the outstanding stock of OpiTV.com. OpiTV.com
was an I-commerce technology company in the development stage with a business
plan to market and distribute a TV device. In November 2000, we acquired an
additional 13% of Primavera Corporation. This increase in equity brought our
indirect ownership of North Texas Circuit Board from 67% to 80%.

In late 2000, we determined that our capital and management resources were
spread too thin to properly address the needs of our three subsidiaries. As a
result, in July of 2001, we sold all of our common stock ownership in Mardock,
Inc. and OpiTV.com.

In July 2001, we acquired the remaining 20% of Primavera's common stock. On
August 20, 2002, we sold North Texas Circuit Board to a third party in exchange
for cancellation of debt of approximately $2,255,860 and retention by us of a
10% interest in the after tax profit of North Texas Circuit Board for a period
of five years subsequent to the consummation of the transaction. On December 27,
2002, we disposed of 100% of Flexxtech Holdings, Inc. Flexxtech Holdings was the
parent corporation of Primavera Corporation. After the sale of North Texas
Circuit Board, Flexxtech Holdings had no significant assets and was disposed of
to Western Cottonwood Corp., an affiliate, for nominal consideration of $10.
On October 1, 2002, we signed to acquire 80% of the outstanding common shares of
W3M, Inc., d/b/a Paradigm Cabling Systems, a privately held California
corporation, in a stock for stock exchange. Paradigm is a full service computer
cabling, networking and telecommunications integrator contractor. As part of the
transaction, we agreed to use our best efforts to arrange for an infusion of
$250,000 in additional capital, either as debt or equity or some combination of
both, to Paradigm, in order to increase its working capital. However, we were
unable to arrange infusion of the capital per the agreement.

On April 8, 2003, we and Paradigm agreed that the transaction was void ab
initio, that is, void at its inception, with the effect that Paradigm remains
the owner of all of its assets and the shares of our preferred stock were
restored to the status of authorized shares. The Purchase Agreement and all
related documents and all documents delivered in connection therewith were
thereby terminated ab initio and were of no force or effect whatsoever. In
connection with funds invested as working capital into Paradigm during the
period from October 1, 2002 until April 1, 2003, we issued to Ashford Capital
LLC and eFund Capital/Barrett Evans, 5 year convertible debentures in the amount
of $65,000 and $75,000 respectively. Ashford and eFund made investments directly
into Paradigm under the assumption that a merger between Paradigm and us would
be consummated. As part of the rescission negotiations, we agreed to issue the
debentures to Ashford and eFund. Michael Cummings, President of Paradigm also
resigned as a Director of our Board of Directors.

On April 9, 2003, we executed a Restructuring Agreement. The Agreement was
executed to restructure our balance sheet in order to more easily attract an
operating business to merge with or acquire. Pursuant to the Restructuring
Agreement, Western Cottonwood Corporation, a related party through a major
shareholder, agreed to forgive its notes receivable and interest receivable from
us as of December 31, 2002. The receivable totaling $1,984,850 was booked in
consideration for cash we received from Western Cottonwood. The receivable
totaling $1,984,850, was forgiven in exchange for shares of our common stock
totaling 4.9% of the total outstanding shares immediately following our first
merger or acquisition transaction. At the time of the transaction, the principal
shareholder of Western Cottonwood Corporation and Atlantis Partners, Inc. was
John Freeland, formerly our largest investor. Mr. Freeland was also formerly an
affiliate through his beneficial ownership of 23% of our total outstanding
shares through Western Cottonwood. To our knowledge, Mr. Freeland is no longer
an affiliate. Pursuant to the agreement, (i) Western Cottonwood and Atlantis
Partners shall maintain a combined ownership percentage of a non-dilutive 4.9%
and Greg Mardock, our former president, shall maintain a combined ownership
percentage of a non-dilutive 2% through our first merger or acquisition
transaction; (ii) Mr. Mardock resigned as President and Director; and (iii)
three nominees of Dutchess Private Equities Fund, LP were appointed directors.
In April 2003, we executed a Letter of Intent to merge with Irvine, CA- based
Network Installation Corporation. The transaction closed in May, 2003. The total
consideration and method of payment was $50,000 in cash and 7,382,000 shares of
our common stock. In addition, we issued a five year option to purchase an
additional 618,000 shares of our common stock to Mr. Cummings if our total
revenue exceeded $450,000 for the period beginning on June 1, 2003 and ending
August 31, 2003. The option is exercisable at a price equal to the closing bid
price of our common stock on August 29, 2003, which was $2.95. Since our total
revenues exceeded $450,000 for the period beginning on June 1, 2003 and ending
August 31, 2003, Mr. Cummings could exercise the option to purchase 618,000
shares of our common stock, however he has forfeited the right to that option.
Network Installation was established in July 1997 as a California corporation as
a low voltage-cabling contractor and in 1999 changed its focus to provide
products, project management, design and installation within the networking and
communications sector.

On March 1, 2004, we acquired Del Mar Systems International, Inc., a
telecommunications solutions provider, as our wholly owned subsidiary. We now
have the ability to provide integrated telecom solutions to customers ranging in
size from 10 to 30,000 users. Del Mar provides Avaya Enterprise Class IP
Solutions to customers as a way to capitalize on the benefits of IP (Internet
Protocol) Telephony. Avaya offers a complete communications architecture that
provides software, infrastructure and services to help enterprises stay
efficient. Del Mar Systems offers both onsite and remote administration of
systems equipped with remote access dial up lines.

OVERVIEW

We are a project engineering company that designs and installs specialty
communication systems for data, voice, video and telecom. We determine our
clients' requirements by doing a need analysis and site audit. Then we implement
our design and specification of the specialty communication system, which may
include Wireless Fidelity, or Wi-Fi, with the deployment of a fixed Wireless
Local Area Network. We believe we can integrate superior solutions across a vast
majority of communication requirements because we have experts in each aspect of
communication services from the design, project management, and the installation
of our products through the maintaining of our products. We earn revenue for
services rendered which include; (i) the installation of data, voice, video and
telecom networks; (ii) the sale of networking products that are installed and
(iii) consulting services in the assessment of existing networks.

On March 1, 2004, we acquired Del Mar Systems International, Inc., a
telecommunications solutions provider. We now have the ability to provide
integrated telecom solutions to customers ranging in size from 10 to 30,000
users. Del Mar provides Avaya Enterprise Class IP Solutions to customers as a
way to capitalize on the benefits of IP, or Internet Protocol, Telephony. Avaya
offers a complete communications architecture that provides software,
infrastructure and services to help enterprises stay efficient. Del Mar Systems
offers both onsite and remote administration of systems equipped with remote
access dial up lines. Del Mar has delivered communication solutions to many well
known companies including General Electric, Western Digital, Bank of America,
Marriott, Holiday Inn, Sheraton and Hilton Hotels throughout the U.S.

INDUSTRY OVERVIEW (SPECIALTY COMMUNICATION SYSTEMS)

A structured cabling system is a set of cabling and connectivity products that
integrates the voice, data, video, and various management systems of a building,
such as safety alarms, security access and energy systems. These systems
typically consist of an open architecture, standardized media and layout,
standard connection interfaces, adherence to national and international
standards, and total system design and installation. Other than the structured
cabling system, voice, data, video, and building management systems have nothing
in common except similar transmission characteristics, such as analog or digital
data signals, and delivery methods such as conduit, cable tray, or raceway, that
support and protect the cabling investment.

Modern Ethernet networking equipment is designed around the concept that each
device in a building's network has a dedicated media connection to a central
"hub". In a standard hub the LAN bandwidth is shared among all the stations.
With dedicated hubs, also called switched technology, a given cable is allocated
for use by a single device.

This was not always the case. The original design of network systems assumed a
common, shared medium: coaxial cable. Structured cabling systems, while having
drawbacks with regards to absolute transmission performance, show considerable
cost savings to the owner by reducing the costs of moves, changes and additions.
These benefits far outweigh the cost of implementation, making structured
cabling the optimum choice for building wiring.

The industry had been dominated by thousands of proprietors with former
employment experience in telecommunications and electrical contracting. With the
boom in technological advances over the past fifteen years, the convergence of
data medium, text, voice, and video has placed a premium in obtaining such
information, faster, cheaper and now wireless. This paradigm shift in the
functionality of data transmission now mandates a more detailed insight into
computer science, project management and a thorough understanding of a potential
customer's total communications needs.

INDUSTRY OVERVIEW (WI-FI)

We believe, in the past two years, Wireless Fidelity, also known as Wi-Fi, has
emerged as the dominant standard for wireless local areas networks, or WLANS
worldwide. A Wi-Fi network can cover an area of typically 100-500 feet with
Internet access hundreds of times faster than a modem connection. Wi-Fi enjoys
100% global acceptance and that it has become a single networking standard for
all developers, equipment manufacturers, service providers and users.

Hundreds of equipment manufacturers are now flooding the market with millions of
Wi-Fi cards and access points. The single Wi-Fi standard ensures these devices
all interoperate with each other, so, for example, an access point made by
Netgear will communicate with a network card from Linksys.

Hundreds of new companies have begun setting up Wi-Fi access points called "hot
spots" in cafes, hotels, airports, book stores and other public spaces. These
hot spot operators install Wi-Fi access points and either sell high speed
wireless Internet access for a fee or offer it to the public for free.
Hot Spot Operators include Wayport, Surf and Sip, StayOnline, Pronto, NetNearU,
Deep Blue, Fatport, Air Portal, Ikano, Picopoint, The Cloud and Azure. In the
last year, major wireless carriers have thrown their hat in the ring, including
T-Mobile, which is building hot spots in Starbucks cafes, Borders book stores,
Kinko's stores and airline clubs, AT&T Wireless, British Telecom, Swisscom,
Telecom Italia and Sprint PCS.

Forces outside the industry are also rapidly arming users with Wi-Fi radios.
Consumers also buying Wi-Fi-compatible hardware in their laptops and PDAs for
use in the office or home.

We believe Wi-Fi is over 100 times faster than a standard modem connection.
Wi-Fi is also significantly faster than the wireless services provided by
cellular carriers which typically deliver throughput between 40k and 60k. The
actual speed experienced by hot spot users is determined by the hot spot's
connection to the Internet, which can range from low-end DSL (384k) to one or
more T1s (1.5Mb and up), but this still promises much faster speed than any
other available technology.

We are seeking to exploit the rapid build up of wireless networks by focusing
our marketing efforts on our currently installed base of universities, K-12,
municipalities and Fortune 1000 companies.

In addition, we have increased our ability to take advantage of the rapid
acceptance and deployment of internet-based telephone communications as a result
of our acquisition of Del Mar Systems International, Inc. Del Mar Systems
provides Voice over Internet Protocol, or VoIP, which offers customers the
ability to effect local and long distance phone calls via the internet for flat
monthly rates, in most cases at a considerable cost savings from traditional per
minute charges from the major telecommunications providers. We now have the
ability to provide VoIP installation and deployment services to our customers
through Del Mar Systems.

OUR BUSINESS

A company's communication network is critical in achieving the timely flow of
information. Typically, a company's network expands beyond its existing
headquarters to remote offices and remote users. The number of networking
applications continues to grow and the demand for high-speed connectivity to
move data back and forth is increasing dramatically. Until recently, a company's
only alternative in obtaining high-speed connectivity was to contact the
telephone company and have a high-speed landline service installed so that
connectivity could be achieved between its locations. The issue today is that
these high-speed landlines take too much time to install, are not available in
all locations, do not solve remote application usage and are costly to use on a
monthly basis.

We seek to exploit the growing demand in high-speed connectivity by providing
complete network solutions including best of breed wireless products,
engineering services for which our technicians design the applications required
for the network build out, structured cabling and deployment. We offer the
ability to integrate superior solutions across the vast majority of
communication requirements.

There are multiple products associated with the deployment of a wireless
solution including microwave equipment, free space optical equipment and
specialty components. There are also important services such as site design,
product integration, structured cabling, network security, training and
technical support. The integration of all these products and services is
critical in achieving the desired results for the customer. The specific
products used and services offered vary depending on the connection speed
required and distances between points. We provide specialty communication
systems, Wi-Fi deployment and WLANs to corporations, municipalities and
educational institutions.

We define wireless deployment as the internal and external design and
installation of a wireless solution to support connectivity between two or more
points without the utilization of landline infrastructure. End users turn to us
to design and integrate a wireless solution, as there are many components from
various technology providers. Wireless solutions can offer a user:
- High-speed connectivity;
- Immediate installation;
- Network ownership; and
- Low costs.

We also provide network security, train end users and provide on-going technical
support to insure a successful installation.

SUPPLIERS

While we are predominately a service company, we purchase and resell products
such as networking routers, cable, software and video equipment that are
involved in our project installations. We purchase our products from various
distributors. Should any of these distributors cease operations, our business
would not be adversely affected because these products are readily available
from multiple distributors locally, regionally or nationally.

We have agreements with Vivato, Motorola Inc. and Aruba Wireless Networks that
give us what we believe to be the finest suite of products in the installation
of wireless solutions. Through our Motorola agreement and the use of one of its
flagship wireless products "The Canopy," we have the ability to install point to
point service directly for Wireless Internet Service Providers or proprietors of
WLANs or expanded 'Hot Zones' up to 4 kilometers through our Vivato agreement.
Vivato is a San Francisco-based network infrastructure company and manufacturer
of the industry's first Wi-Fi switches for enterprises and service providers.
Adhering to the IEEE 802.11 standard, Vivato's patent-pending PacketSteering
(TM) technology changes the old rules of Wi-Fi deployment. Vivato Wi-Fi switches
deliver unprecedented range and capacity, with enterprise-class security.
Aruba's family of Wi-Fi switches deliver centralized wireless security and
management of all types of enterprise environments.

We also have reseller agreements for dial tone and high speed internet access
with XO Communications, Qwest, Inc., Mpower, Inc. and Paetec. We act as a
non-exclusive agent for these companies.

SALES AND MARKETING

Our employees market and sell our services through a direct team of five sales
and project management professionals. We are proactive and able to visit
personally with our clients from time to time. We do not employ an outside sales
force.

We also use several methods of mass marketing to advertise our products and
services including direct mailings, and the distribution of brochures which
describe our services. Additionally, we maintain a web site that describes our
services. We believe that these methods of marketing are a key factor in the
securing of new business.

CUSTOMERS

We currently provide our products and services to the markets in K-12 education,
universities, municipalities and Fortune 1000 companies. Some of our current
customers include the University of California - Los Angeles, SAIC. Travelers
Insurance and Greenpoint Financial No other customer represents more than 10% of
our annual revenue.

COMPETITION

The network cabling market is very fragmented and highly competitive. In the
markets where we operate, we experience intense competition from other
independent providers of network solutions. Our competitors include regional,
privately-held companies including Sunglo Communications, Pacific Coast Cabling,
and Netversant. We are aware of only one publicly-traded competitor, WPCS
International Inc. There is no one dominant competitor. We believe that success
in the industry is based on maintenance of product quality, competitive pricing,
delivery efficiency, customer service and satisfaction levels, maintenance of
satisfactory dealer relationships, and the ability to anticipate technological
changes and changes in customer preferences. We believe our competitive
advantage lies in our ability to provide superior customer service while
offering a more diverse line of hard product offering than our competitors.

EMPLOYEES

As of July 15, 2004, we employed 28 full time employees, Three are executives,
ten are in sales and marketing, thirteen are project managers or technicians and
one is in administration. We believe our relations with all of our employees are
good.

MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

You should read this section together with our consolidated financial statements
and related notes thereto included in this report.

OVERVIEW

We are a project engineering company that focuses on the implementation
requirements of specialty communication systems, Wireless Fidelity, or Wi-Fi,
deployment and fixed Wireless Local Area Networks, or WLANs. We offer the
ability to integrate superior solutions across a vast majority of communication
requirements.

We have a two-pronged approached to our business model. One is the continued
focus on our core competency of project management in wired networking
infrastructure, design, installation and support of communications solutions.
Second, is to leverage that expertise in our pursuit of the infrastructure to
build-out of Wi-Fi and WLANs.

CRITICAL ACCOUNTING POLICIES

We have identified the policies below as critical to our business operations and
the understanding of our results of operations. The impact and any associated
risks related to these policies on our business operations are discussed
throughout this section where such policies affect our reported and expected
financial results. Our preparation of our Consolidated Financial Statements
requires us to make estimates and assumptions that affect the reported amounts
of assets and liabilities, disclosure of contingent assets and liabilities at
the date of our financial statements, and the reported amounts of revenue and
expenses during the reporting period. There can be no assurance that actual
results will not differ from those estimates.

Our accounting policies that are the most important to the portrayal of our
financial condition and results, and which require the highest degree of
management judgment relate to revenue recognition, the provision for
uncollectible accounts receivable, property and equipment, advertising and
issuance of shares for service.

Our revenue recognition policies are in compliance with all applicable
accounting regulations, including American Institute of Certified Public
Accountants Statement of Position 81-1, Accounting for Performance of
Construction-Type and Certain Production-Type Contracts. Revenues from
installations, cabling and networking contacts are recognized when the contracts
are completed. The completed-contract method is used because the contracts are
short-term in duration or we are unable to make reasonably dependable estimates
of the costs of the contracts. Our revenue recognition policy for sale of
network products is in compliance with Staff accounting bulletin 104. Revenue
from the sale of network products is recognized when a formal arrangement
exists, the price is fixed or determinable, the delivery is completed and
collectibility is reasonably assured.

We estimate the likelihood of customer payment based principally on a customer's
credit history and our general credit experience. To the extent our estimates
differ materially from actual results, the timing and amount of revenues
recognized or bad debt expense recorded may be materially misstated during a
reporting period.

Property and equipment is carried at cost. Depreciation of property and
equipment is provided using the declining balance method over the estimated
useful lives of the assets at five to seven years. Expenditures for maintenance
and repairs are charged to expense as incurred.

We expense advertising costs as incurred.

We account for the issuance of equity instruments to acquire goods and services
based on the fair value of the goods and services or the fair value of the
equity instrument at the time of issuance, whichever is more reliably
measurable.

GOING CONCERN OPINION

Our audited financial statements for the fiscal year ended December 31, 2003,
reflect a net loss of ($3,434,607). Although these conditions raised substantial
doubt about our ability to continue as a going concern if we do not acquire
sufficient additional funding or alternative sources of capital to meet our
working capital needs, we believe we could continue operating for the next
twelve months without additional capital but would have to curtail our
operations and plans for expansion. To meet our future obligations, we intend,
from time to time, to issue shares of common stock or issue convertible
debenture in private placements. While we believe that we will be able to
access funds in the manner we have been able to in the past, it is possible we
will not be able to raise funds on acceptable terms or at all.

TWELVE MONTH PERIOD ENDED DECEMBER 31, 2003 AS COMPARED TO TWELVE MONTH PERIOD
ENDED DECEMBER 31, 2002 (RESTATED FOR DISPOSAL OF SUBSIDIARIES)

NET REVENUES
-------------

Net revenues for the year ended December 31, 2003 were $1,233,908 compared to
$804,080 for the year ended December 31, 2002 due to increased marketing and
contracts received. We also experienced an increase in higher education
contracts during the period ended December 31, 2003 vs. same period in 2002 due
to an increase in target marketing to this sector. Our year to date revenues are
higher than the same period a year ago due to an increase in the total amount of
new contracts received. All of our revenue in the current period is from Network
Installation Corp. Our operations from the subsidiaries disposed of in 2002 have
been separately classified in the Statements of Operations.

COST OF REVENUES
------------------

Cost of revenues for the year ended December 31, 2003 were $965,569 compared to
$568,444 for the year ended December 31, 2002. Our Cost of Revenue increased for
the 12 months ended December 31, 2003 when compared to the same period in 2002,
due to a decrease in Revenues for the three month period ended September 30,
2003.

OPERATING EXPENSES
-------------------

Operating Expenses for the year ended December 31, 2003 were $2,306,774 compared
to $340,267 for the year ended December 31, 2002 due to the issuance of shares
of common stock recorded as $889,550 for consulting fees in 2003.

OTHER INCOME (EXPENSE)
------------------------

Other Income (Expense) for the year ended December 31, 2003 was ($1,394,607)
compared to ($4,375) for the year ended December 31, 2002. The increase on Other
Expenses is primarily due to increased interest expenses from the conversion of
debentures and $1,199,700 for the issuance of common stock for an investment;
in conjunction with convertible debentures which were recorded as Loss on
Conversion and Interest Expense respectively.

NET LOSS
---------

Net Loss for the year ended December 31, 2003 was ($3,434,607) compared to
($109,806) for the year ended December 31, 2002 due to increased Interest and
General, Administrative and Selling Expenses.

BASIC AND DILUTED LOSS PER SHARE
-------------------------------------

Our basic and diluted loss for the year ended December 31, 2003 was ($0.34)
compared to ($0.01) for the year ended December 31, 2002 due to an increase of
our Net Loss.

THREE MONTH PERIOD ENDED MARCH 31, 2004 AS COMPARED TO THREE MONTH PERIOD ENDED
MARCH 31, 2003

RESULTS OF OPERATIONS
-----------------------

We generated consolidated revenues of $510,522 for the three month period ended
March 31, 2004, as compared to $442,463 for the three month period ended March
31, 2003. The increase in revenues for this quarter when compared to the same
quarter last year is due to the increase in marketing expenditures, increase in
our sales force and the acquisition of Del Mar Systems, which contributed
only nominally to our revenue for the quarter.

COST OF REVENUE
-----------------

We incurred Cost of Revenue of $320,220 for the three month period ended March
31, 2004, as compared to $186,359 for the three month period ended March 31,
2003. Our Cost of Revenue increase is due to an increase in the expansion of
locations from the prior quarter which were expensed in the period ending March
31, 2004.

Gross Profit
-------------

We had gross profit of $190,302 for the three month period ended March 31,
2004, as compared to $256,104 for the three month period ended March 31, 2003.
The decrease in gross profit for this quarter when compared to the same quarter
last year is due to an increase in our Cost Of Revenue and the acquisition of
Network Installation Corp.

GENERAL, ADMINISTRATIVE AND SELLING EXPENSES
------------------------------------------------

We incurred costs of $584,367 for the three month period ended March 31, 2004 as
compared to $192,001 for the three month period ended March 31, 2003,
respectively. General, Administrative and Selling Expenses in the current period
increased is due to the increase in professional and consulting fees and
headcount including branch sales managers, VP Marketing & Sales and direct sales
force.

NET LOSS BEFORE INCOME TAXES
--------------------------------

We had a loss before taxes of ($546,122) for the three month period ended March
31, 2004 as compared to net income of 62,352 for the three month period ended
March 31, 2003. The increase is due to an increase in our expenses including
marketing expenses, travel and headcount including branch sales managers, VP
Marketing & Sales and direct sales force.

NET INCOME (LOSS)
------------------

We had a loss of ($546,122) for the three month period ended March 31, 2004 as
compared to income before income taxes of $62,352 for the three month period
ended March 31, 2003. The increase in net income (loss) is due to the factors
described above.

BASIC AND DILUTED INCOME (LOSS) PER SHARE
-------------------------------------

Our basic and diluted income (loss) per share for the three month period ended
March 31, 2004 was ($0.04) as compared $.01 for the three month ended March 31,
2003.

LIQUIDITY AND CAPITAL RESOURCES
----------------------------------

As of March 31, 2004, our Current Assets were $283,894 and Current Liabilities
were $1,959,024. Cash and cash equivalents were $0. Our Stockholder's Deficit at
March 31, 2004 was ($1,613,982).

We had a net usage of cash due to operating activities for the three month
period ended March 31, 2004 of $(324,910). We had net cash provided by financing
activities of $324,243 for the three month period ended March 31, 2004 which was
mainly due from borrowings of $426,989 in the period ended March 31, 2004.

FINANCING ACTIVITIES
---------------------

As of July 22, 2004, we had issued convertible debentures of $918,500 to
Dutchess Private Equities Fund and Dutchess Private Equities Fund, II,
collectively. The holders of the debentures are entitled to convert the face
amount of these debentures, plus accrued interest at the lesser of (i) 75% of
the lowest closing bid price during the 15 trading days prior to the conversion
date or (ii) 100% of the average of the closing bid prices for the 20 trading
days immediately preceding the closing date. The various convertible debentures
shall pay a coupon ranging from 6% to 8% cumulative interest. We make interest
payments beginning on April 25, 2004, in an amount equal to $3,500.00, in cash,
to the holder for the debentures on March 31, 2004, April 4, 2004 and April 14,
2004. Each subsequent payment thereafter shall be tendered every thirty days
from said date in the same amount, in cash, to the holder. We may make
prepayments at any time. The debentures are payable on March 31, 2009. The
convertible debentures are convertible into shares of our common stock.

On May 31, 2004, we closed a private placement offering of 745,001 shares of our
common stock priced at $3.00 per share, totaling $2,345,000 and a warrant to
purchase a common share of common stock for $5.00 per share.

CAPITAL COMMITMENTS

On March 1, 2004, we entered into a Promissory Note Agreement for $500,000 with
Stephen Pearson, for the acquisition of Del Mar Systems, Inc. The note bears 5%
interest per annum and we make payments of $41,667 per month toward the balance,
maturing in April 2005. The balance outstanding at March 31, 2004 was $459,280.

As of July 22, 2004, a portion of the convertible debentures totaling $250,500
issued to Dutchess Fund and Dutchess Private Equities Fund, II, collectively
require us to make interested payments. We make interest payments beginning on
April 25, 2004, in an amount equal to $3,500.00, in cash, to the holder for the
debentures on March 31, 2004, April 4, 2004 and April 14, 2004. Each subsequent
payment thereafter shall be tendered every thirty days from said date in the
same amount, in cash, to the holder. We may make prepayments at any time. The
debentures are payable on March 31, 2009.

On February 23, 2004, we issued a note in the amount of $46,489. The note bears
no interest rate and is payable on July 30, 2004.

We have an unsecured, non-interest bearing note for $25,000 due November 2005.

We have a $45,500 loan payable due in March 31, 2005.

We settled litigation with Arman Moheban that requires us to pay $22,400 in four
equal monthly installments of $5,600 beginning July 1, 2004. As of July 20, we
have made one payment of $5,600.

SUBSIDIARIES
------------

As of March 31, 2004, we had two wholly-owned subsidiaries, Network Installation
Corp. and Del Mar Systems International, Inc.

DESCRIPTION OF PROPERTY

We currently sublease 2,500 sq ft. of office space located in a technology park
at 18 Technology Dr., Suite 140A, Irvine, CA. Our monthly rent is approximately
$2,300 per month, and our lease runs month to month.

On June 1, 2004, we entered into a lease agreement for an office located at 7702
E. Doubletree Ranch Road Suite 500, Scottsdale, AZ, for approximately 1 year at
a fee of $750 per month.

On May 20, 2004, we entered into a lease agreement for an office located at 2377
Gold Meadow Way, Gold River, CA, for approximately 3 months at a fee of $596 per
month.

On January 6, 2004, we entered into a lease agreement for an office located at
3960 Howard Hughes Parkway 5th Floor, Las Vegas, NV, for approximately 2 months
at a fee of $668 per month.

On March 1, 2004, we entered into a lease agreement for an office located at
11601 Wilshire Blvd., Suite 500, Los Angeles, CA, for approximately 6 months at
a fee of $790 per month.

On June 1, 2004, we entered into a lease agreement for an office located at 601
Union Street, Two Union Square, 42nd Floor, Seattle, WA, for approximately 6
months at a fee of $260 per month.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

On October 7, 2002, we issued 51,361 shares of common stock in the name of
Delaware Charter Guarantee and Trust, FBO Greg Mardock, our CEO and a director
at that time, in exchange for a promissory note of $64,588 principal amount and
interest of $5,861. This transaction is no less favorable than if we had entered
into it on an arms length basis with an unrelated third party.

On October 8, 2002, we issued to 21,250 and 8,750 shares to Edward R. Fearon,
and Escamilla Capital Corporation respectively, both related parties. Fearon and
Hector Escamilla were each an officer and director of both Primavera Corp. and
Escamilla Capital Corporation. In addition, Fearon was CEO of our former
subsidiary NTSB. These shares were issued in exchange for notes issued by
Primavera Corporation to BECO M-A, L.P. and BECO Joint Venture No. 1 amounting
to $60,000 and accrued interest of $16,595 total consideration of $76,595.
Fearon and Escamillia were also officers and directors of BECO M-A, L.P. and
BECO Joint Venture No. 1. When we acquired Primavera Corp. we also acquired its
liability to BECO M-A, L.P. and BECO Joint Venture No. 1. Mr. Fearon and
Escamilla Capital Corporation agreed to accept shares to settle the debt instead
of cash. This transaction is no less favorable than if we had entered into it on
an arms length basis with an unrelated third party.

On October 31, 2002, Western Cottonwood Corporation, a related entity, agreed to
convert $2,000,000 in debt owed by us to 200 shares of our Series A Preferred
Stock. Subsequent to December 31, 2002 the shares were not issued and the
agreement was mutually voided. This transaction is no less favorable than if we
had entered into it on an arms length basis with an unrelated third party.
On November 5, 2002, we issued Western Cottonwood Corp 75,000 shares of common
stock in exchange for $75,000 in Promissory Notes. Subsequent to December 31,
2002 the note was amended to be in exchange for $300,000 in Promissory Notes.
This transaction is no less favorable than if we had entered into it on an arms
length basis with an unrelated third party.

On April 7, 2003, we issued 800,000 shares of common stock to Dutchess Private
Equities Fund as inducement for debentures amounting to $80,000. The shares were
valued at $120,000. This transaction is no less favorable than if we had entered
into it on an arms length basis with an unrelated third party.

On April 8, 2003, we entered into an agreement to rescind the acquisition of
W3M, Inc., d/b/a Paradigm Cabling Systems, from its inception. The agreement was
made available in our 10-KSB filed on April 15, 2003. In order to acquire 80% of
the outstanding common stock of Paradigm, we entered into an acquisition
agreement dated October 31, 2002. Pursuant to the terms of the acquisition, 80%
of the outstanding capital stock of Paradigm was transferred to us. In exchange,
we agreed to issue shares of a new Series A Convertible Preferred Stock to the
exchanging shareholders of Paradigm as follows:

Name No. Of Shares of Series A Convertible Preferred
----- -----------------------------------------------
Michael Cummings 71.25 shares
Ashford Capital 71.25 shares
Total 142.50 shares

This transaction is no less favorable than if we had entered into it on an arms
length basis with an unrelated third party.

We subsequently agreed with Paradigm to void the transaction ab initio (that is,
at its inception), with the effect that Paradigm is the owner of its Assets and
Liabilities and the shares of our Preferred Stock issued to Paradigm are
restored to the status of authorized but unissued shares. We exchanged mutual
general releases with Paradigm in order to restore the parties to their
respective positions immediately prior to the execution and delivery of the
purchase agreement. This transaction is no less favorable than if we had entered
into it on an arms length basis with an unrelated third party.

On April 9, 2003, we entered into a Restructuring & Release Agreement with Greg
Mardock, John Freeland, Western Cottonwood Corporation, Atlantis Partners and
VLK Capital Corp. Pursuant to this Agreement, Greg Mardock resigned as our
director and employee and Michael A. Novielli, Douglas H. Leighton and Theodore
J. Smith, Jr. were appointed as directors. Listed below are additional
obligations of parties to the Agreement:
- Western Cottonwood Corporation agreed to forgive $1,984,849.99 in Notes
receivable and interest receivable as of December 31, 2002.
- Greg Mardock resigned as our officer and employee.
- Messrs. Mardock and Freeland immediately released any and all claims to
collateral, security or title of any of our assets.
- Western Cottonwood and Atlantis Partners will maintain a combined ownership
percentage of 4.9%. The percentage ownership of 4.9% shall be non-dilutive
through our first merger or acquisition transaction with a going concern.
- Greg Mardock will maintain an ownership percentage of 2.0%. His ownership
percentage of 2.0% shall be non-dilutive through our first merger or
acquisition transaction with a going concern.
- We issued 690,000 shares of common stock as a part of restructuring
agreement at a value of $1,727,908. All stock issued to the parties to this
Agreement was restricted and had no registration rights. The parties also
agreed to additional rules governing resale of the shares. The shares may
not be sold either in the public market nor in a private transaction for a
period of one year, the parties may not sell more than one twelfth of their
entire ownership stake in any one month for a period covering the
thirteenth month through the twenty fourth month. Additionally, for a
period of time the stock is not transferable and may not be loaned. This
transaction is no less favorable than if we had entered into it on an arms
length basis with an unrelated third party.

On April 1, 2003 we entered into a Consulting Agreement with Dutchess Advisors
LLC, where Dutchess Advisors would provide the following services:
- Assist us with our capitalization and restructuring; and
- Assist us with our business development by seeking potential business
partners, candidates for joint ventures, mergers and acquisitions or
qualified persons to join our board of directors. This transaction as no
less favorable than if we had entered into it on an arms length basis with
an unrelated third party.

We agreed to pay Dutchess Advisors 700,000 shares of common stock for these
services. These shares were valued at $105,000. Additionally, we agreed to pay
$3,000 per month for non accountable expenses for months 1-12 and $5,000 per
month for months 13-24. The term of the Consulting Agreement is 24 months. In
June 2003, we amended the Agreement to pay Dutchess Advisors $5,000 per month
beginning June 2003. This transaction is no less favorable than if we had
entered into it on an arms length basis with an unrelated third party.

On April 10, 2003, we issued convertible debentures of $40,000 to Dutchess
Private Equities Fund. The debentures convert into common stock at the
lesser of (i) 75% of the lowest closing bid price during the fifteen trading
days prior to the Conversion Date or (ii) 100% of the average of the closing bid
prices for the twenty trading days immediately preceding the Closing Date of the
transaction. This transaction is no less favorable than if we had entered into
it on an arms length basis with an unrelated third party.

On May 5, 2003, we issued convertible debentures of $15,000 to Dutchess Private
Equities Fund, LP. The debentures convert into common stock at the lesser of (i)
75% of the lowest closing bid price during the fifteen trading days prior to the
Conversion Date or (ii) 100% of the average of the closing bid prices for the
twenty trading days immediately preceding the closing date of the transaction.
This transaction is no less favorable than if we had entered into it on an arms
length basis with an unrelated third party.

On May 16, 2003, we entered into a Stock Purchase Agreement with Michael
Cummings, the owner of 100% of the outstanding shares of common stock of Network
Installation, Inc., or Network. Pursuant to this Agreement, we acquired all
outstanding shares of common stock of Network. The purchase price consisted of
$50,000 and 7,382,000 shares of our common stock. In addition, we agreed to
issue a five year option to purchase an additional 618,000 shares of our common
stock to Mr. Cummings if Network's total revenue exceeds $450,000 for the period
beginning on June 1, 2003 and ending August 31, 2003. Network's total revenues
exceeded $450,000 for the period beginning June 1, 2003 and ending August 31,
2003. The options are exercisable at a price equal to the closing bid price of
our common stock on August 29, 2003 which was $2.95. As of January 15, 2004, Mr.
Cummings has not exercised the options. At the time of the acquisition there
were no material relationships between us and Mr. Cummings. As a result of the
acquisition, Mr. Cummings replaced Mr. Novielli as Chief Executive Officer and
became our director. Mr. Novielli remained as Chairman of the Board of
Directors. This transaction is no less favorable than if we had entered into it
on an arms length basis with an unrelated third party.

On May 26, 2003, we issued convertible debentures of $25,000 to Dutchess Private
Equities Fund. The debentures convert into common stock at the lesser of (i) 75%
of the lowest closing bid price during the fifteen trading days prior to the
Conversion Date or (ii) 100% of the average of the closing bid prices for the
twenty trading days immediately preceding the closing date of the transaction.
This transaction is no less favorable than if we had entered into it on an arms
length basis with an unrelated third party.

On June 16, 2003, we issued convertible debentures of $25,000 to Dutchess
Private Equities Fund. The debentures convert into common stock at the lesser of
(i) 75% of the lowest closing bid price during the fifteen trading days prior to
the Conversion Date or (ii) 100% of the average of the closing bid prices for
the twenty trading days immediately preceding the Closing Date of the
Transaction. This transaction is no less favorable than if we had entered into
it on an arms length basis with an unrelated third party.

On July 22, 2003, we issued convertible debentures of $15,000 to Dutchess
Private Equities Fund. The debentures convert into common stock at the lesser of
(i) 75% of the lowest closing bid price during the fifteen trading days prior to
the Conversion Date or (ii) 100% of the average of the closing bid prices for
the twenty trading days immediately preceding the closing date of the
transaction. This transaction is no less favorable than if we had entered into
it on an arms length basis with an unrelated third party.

On July 28, 2003, we issued convertible debentures of $95,000 to Dutchess
Private Equities Fund. The debentures convert into common stock at the lesser of
(i) 75% of the lowest closing bid price during the fifteen trading days prior to
the Conversion Date or (ii) 100% of the average of the closing bid prices for
the twenty trading days immediately preceding the closing date of the
transaction. This transaction is no less favorable than if we had entered into
it on an arms length basis with an unrelated third party.

On August 13, 2003, we issued convertible debentures of $20,000 to Dutchess
Private Equities Fund. The debentures convert into common stock at the lesser of
(i) 75% of the lowest closing bid price during the fifteen trading days prior to
the Conversion Date or (ii) 100% of the average of the closing bid prices for
the twenty trading days immediately preceding the closing date of the
transaction. This transaction is no less favorable than if we had entered into
it on an arms length basis with an unrelated third party.

On the respective dates above, from April 10, 2003, for each issuance of
convertible debentures mentioned above, we issued 100,000 shares of common stock
for each $10,000 invested, for a total of 2,350,000 shares to Dutchess Private
Equities Fund in 2003 as incentive per the debenture agreement. This
transaction is no less favorable than if we had entered into it on an arms
length basis with an unrelated third party.

On September 10, 2003, we issued convertible debentures of $28,000 to Dutchess
Private Equities Fund. The debentures convert into common stock at the lesser of
(i) 75% of the lowest closing bid price during the fifteen trading days prior to
the Conversion Date or (ii) 100% of the average of the closing bid prices for
the twenty trading days immediately preceding the closing date of the
transaction. This transaction is no less favorable than if we had entered into
it on an arms length basis with an unrelated third party.

On September 18, 2003, we entered into a Promissory Note with Dutchess Private
Equities Fund. The note carries no interest rate and was due on October 17,
2003. As of January 27, 2004, we had paid the entire amount due. This
transaction is no less favorable than if we had entered into it on an arms
length basis with an unrelated third party.

On October 5, 2003, we issued convertible debentures of $75,000 to Dutchess
Private Equities Fund. The debentures convert into common stock at the lesser of
(i) 75% of the lowest closing bid price during the fifteen trading days prior to
the Conversion Date or (ii) 100% of the average of the closing bid prices for
the twenty trading days immediately preceding the Closing Date of the
Transaction. This transaction is no less favorable than if we had entered into
it on an arms length basis with an unrelated third party.

On December 17, 2003, we entered into a Promissory Note with Dutchess Private
Equities Fund. The note carries no interest rate and is due on December 17,
2005. This transaction is no less favorable than if we had entered into it on an
arms length basis with an unrelated third party.

On January 5, 2004 we issued 11,462 shares of common stock for assumption
of a liability in the amount of $32,552 by Dutchess Private Equities Fund. This
transaction is no less favorable than if we had entered into it on an arms
length basis with an unrelated third party.

On February 27, 2004, we issued convertible debentures of $260,000 to Dutchess
Private Equities Fund for forgiveness of Promissory Notes on December 17, 2003
($35,000), January 9, 2004 ($125,000), February 2, 2004 ($75,000), and
February 5, 2004 ($25,000) due and payable on their respective dates. The
holder of the debentures is entitled to convert the face amount of these
debentures, plus accrued interest into common stock at the lesser of (i) 75% of
the lowest closing bid price during the 15 trading days prior to the conversion
date or (ii) 100% of the average of the closing bid prices for the 20 trading
days immediately preceding the closing date. The convertible debentures shall
pay 6% cumulative interest, in cash or in shares of common stock, at our option,
at the time of each conversion. The debentures are payable on February 27, 2009.
This transaction is no less favorable than if we had entered into it on an arms
length basis with an unrelated third party.

On March 1, 2004, we issued convertible debentures of $155,500 to Dutchess
Private Equities Fund. The holder of the debentures is entitled to convert the
face amount of this debentures, plus accrued interest into common stock at the
lesser of (i) 75% of the lowest closing bid price during the 15 trading days
prior to the conversion date or (ii) 100% of the average of the closing bid
prices for the 20 trading days immediately preceding the closing date. The
convertible debentures shall pay 6% cumulative interest, in cash or in shares of
common stock, at our option, at the time of each conversion. The debentures are
payable on March 1, 2009. This transaction is no less favorable than if we had
entered into it on an arms length basis with an unrelated third party.

On March 31, 2004, we issued convertible debentures of $155,000 to Dutchess
Private Equities Fund, II. The holder of the debentures is entitled to
convert the face amount of this debentures, plus accrued interest into common
stock at the lesser of (i) 75% of the lowest closing bid price during the 15
trading days prior to the conversion date or (ii) 100% of the average of the
closing bid prices for the 20 trading days immediately preceding the closing
date. The convertible debentures shall pay 8% cumulative interest. We make
interest payments beginning on April 25, 2004, in an amount equal to
$2,000.00, in cash, to the Holder. Each subsequent payment thereafter shall
be tendered every thirty (30) days from said date in the same amount, in cash,
to the Holder. We may make prepayments at any time. The debentures are payable
on March 31, 2009. The debentures were funded on April 1, 2004. This
transaction is no less favorable than if we had entered into it on an arms
length basis with an unrelated third party.

on April 4, 2004, we issued convertible debentures of $50,000 to Dutchess
Private Equities Fund, II . The holder of the debentures is entitled to
convert the face amount of these debentures, plus accrued interest into common
stock at the lesser of (i) 75% of the lowest closing bid price during the 15
trading days prior to the conversion date or (ii) 100% of the average of the
closing bid prices for the 20 trading days immediately preceding the
closing date. The convertible debentures pay 8% cumulative interest, in cash
or in shares of common stock, at our option, at the time of each conversion. The
debentures are payable on April 4, 2009. We make interest payments beginning on
May 8, 2004, in an amount equal to $500.00, in cash, to the Holder. Each
subsequent payment thereafter shall be tendered every thirty (30) days from
said date in the same amount, in cash, to the Holder. We may make
prepayments at any time. The debentures are payable on March 31, 2009. As
of July 20, 2004, the Debenture has been repaid in the amount of $40,000. This
transaction is no less favorable than if we had entered into it on an arms
length basis with an unrelated third party.

Convertible debentures of $50,000 issued to Dutchess Private Equities Fund, II
on April 14, 2004. The holder of the debentures is entitled to convert the
face amount of these debentures, plus accrued interest into common stock at the
lesser of (i) 75% of the lowest closing bid price during the 15 trading days
prior to the conversion date or (ii) 100% of the average of the closing bid
prices for the 20 trading days immediately preceding the closing date. The
convertible debentures pay 8% cumulative interest, in cash or in shares of
common stock, at our option, at the time of each conversion. The debentures are
payable on April 14, 2009. We make interest payments beginning on May 14, 2004,
in an amount equal to $100.00, in cash, to the Holder. Each subsequent
payment thereafter shall be tendered every thirty (30) days from said date in
the same amount, in cash, to the Holder. We may make prepayments at any time.
The debentures are payable on March 31, 2009. As of July 20, 2004, the
debenture has been repaid in full and is no longer an outstanding obligation.
This transaction is no less favorable than if we had entered into it on an arms
length basis with an unrelated third party.

We have an unsecured, non-interest bearing notes for $87,691 due June 15, 2004,
due to Michael Cummings.. An additional $46,489 was contracted during the three
month ended March 31, 2004. This additional advance is non-interest bearing and
due July 30, 2004. This transaction is no less favorable than if we had entered
into it on an arms length basis with an unrelated third party.

During the three months ended March 31, 2004, we repaid a $76,000 due to
Dutchess Private Equities Fund under a factoring agreement for the
Promissory note on September 18, 2003. This transaction is no less favorable
than if we had entered into it on an arms length basis with an unrelated third
party.

MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Bid and ask quotations for our common shares are routinely submitted by
registered broker dealers who are members of the National Association of
Securities Dealers on the NASD Over-the-Counter Electronic Bulletin Board. These
quotations reflect inner-dealer prices, without retail mark-up, mark-down or
commission and may not represent actual transactions. The high and low bid
information for our shares for each quarter for the last two years, so far as
information is reported, through the quarter ended June 30, 2004, as reported by
the Bloomberg Financial Network, are as follows:

Quarter Ended High Bid Low Bid
31-Mar-02 . . $ 0.86 $ 0.22
30-Jun-02 . . $ 0.51 $ 0.15
30-Sep-02 . . $ 0.20 $ 0.02
31-Dec-02 . . $ 0.03 $ 0.00
31-Mar-03 . . $ 2.00 $ 0.05
30-Jun-03 . . $ 0.35 $ 0.15
30-Sep-03 . . $ 5.35 $ 0.80
31-Dec-03 . . $ 3.50 $ 3.10
31-Mar-04 . . $ 5.30 $ 3.50
30-Jun-04 . . $ 5.50 $ 2.90

NUMBER OF SHAREHOLDERS

As of July 20, 2004, we had approximately 1,014 shareholders of record.

DIVIDEND POLICY

We have never declared dividends on our common shares and we do not anticipate
declaring any dividends in the foreseeable future, though there are no existing
restrictions on the authority of the Board of Directors to declare dividends out
of funds legally available for the payment of dividends.

EXECUTIVE COMPENSATION

The following table sets forth the annual and long-term compensation for the
fiscal years ended December 31, 2003, 2002, 2001 and paid or accrued by us to
our Chief Executive Officer. No executive officers earned more than $100,000 in
the 2002 and 2001 fiscal years.

SUMMARY COMPENSATION TABLE

ANNUAL COMPENSATION LONG TERM COMPENSATION
-------------------- -----------------------
AWARDS PAYOUTS
----------- ------------
NAME AND PRINCIPAL YEAR SALARY BONUS OTHER RESTRICTED SECURITIES LTIP ALL OTHER
POSITION ($) ($) ANNUAL STOCK UNDERLYING PAYOUT($) COMP.($)
COMPENSATION ($) AWARDS OPTIONS/SARS

Greg Mardock, (1)2001 0 0 0 156,666 0 0 0
Chief Executive Officer (2)2002 $12,000 0 0 0 0 0 0
Michael Cummings, Chief 2003 $100,000 0 0 0 0 0 152,700 (3)
Executive Officer

(1) Mr. Mardock received compensation from Mardock, Inc., a subsidiary of our
wholly-owned subsidiary, Flexxtech Holdings, Inc. at that time.

(2) Mr. Mardock received compensation from Mardock, Inc., a subsidiary of our
wholly-owned subsidiary at that time, Flexxtech Holdings, Inc. VLK Capital Corp.
was issued 5,909,333 shares of common stock for managerial services valued at
$.902 per share, as amended for the 18 month period from January 2001 through
June 2002. VLK subsequently issued 783,333 shares to Greg Mardock.

(3) Mr. Cummings received 100,000 shares of common stock valued at $1.527 per
share as compensation for serving on the Board of Directors.

Mr. Mardock resigned in April, 2003. Mr. Cummings became our Chief Executive
Officer in May 2003.

EMPLOYMENT AGREEMENTS

We executed an employment agreement with Mr. Cummings on May 23, 2004. The
employment agreement shall continue in effect for a period of one year and can
be renewed upon mutual agreement between Mr. Cummings and us. We may terminate
the employment agreement at our discretion during the initial term, provided
that we shall pay Mr. Cummings an amount equal to payment at Mr. Cumming's base
salary rate for six months. We can also terminate the employment agreement for
cause with no financial obligations to Mr. Cummings. Mr. Cummings currently
earns a gross salary of $16,000 per month and 5% of the adjusted net profits for
a one-year period ending on May 23, 2005.

We executed an employment agreement with Mr. Robert W. Barnett on January 19,
2004. Mr. Barnett earns an annual salary of $108,000 with commissions/bonuses to
be determined upon arrival of up to approximately $142,000, and a car allowance
of $600 per month. At 1 year of employment, Mr. Barnett shall earn and accrue
severance payments based on year-to-year sales performance relating to the
agreed annual Company revenue plan. These payments shall accrue at the rate of 1
month per year of employment, up to a maximum of 6 months severance, and shall
only be effective in the event that we terminate his employment if for any
reason other than the reasons relating to the "Termination for Cause" section.

DIRECTORS COMPENSATION

During the twelve month period ended December 31, 2003, each Board Member
received 100,000 shares of common stock for their duties.
We do not have a formal plan to compensate directors.

ADDITIONAL INFORMATION

Our common stock is registered with the SEC under section 12(g) of the
Securities Exchange Act of 1934. We file with the SEC periodic reports on Forms
10-KSB, 10-QSB and 8-K, and proxy statements, and our officers and directors
file reports of stock ownership on Forms 3, 4 and 5. We intend to send annual
reports containing audited financial to the shareholders. Additionally, we filed
with the Securities and Exchange Commission a registration statement on Form
SB-2 under the Securities Act of 1933 for the shares of common stock in the
offering, of which this prospectus is a part. This prospectus does not contain
all of the information in the registration statement and the exhibits and
schedule that were filed with the registration statement. For further
information we refer you to the registration statement and the exhibits and
schedule that were filed with the registration statement.

Statements contained in this prospectus about the contents of any contract or
any other document that is filed as an exhibit to the registration statement are
not necessarily complete, and we refer you to the full text of the contract or
other document filed as an exhibit to the registration statement. A copy of the
registration statement and the exhibits and schedules that were filed with the
registration statement may be inspected without charge at the Public Reference
Room maintained by the Securities and Exchange Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549, and copies of all or any part of the registration
statement may be obtained from the Securities and Exchange Commission upon
payment of the prescribed fee. Information regarding the operation of the Public
Reference Room may be obtained by calling the Securities and Exchange Commission
at 1-800-SEC-0330.

The Securities and Exchange Commission maintains a web site that contains
reports, proxy and information statements, and other information regarding
registrants that file electronically with the SEC. The address of the site is
www.sec.gov.

FINANCIAL STATEMENTS

REPORT OF INDEPENDENT AUDITORS

TO THE STOCKHOLDERS AND BOARD OF DIRECTORS NETWORK INSTALLATION CORPORATION
We have audited the accompanying consolidated balance sheet of Network
Installation Corp. (formerly, Flexxtech Corporation), a Nevada Corporation and
subsidiary, as of December 31, 2003 and the related consolidated statements of
operations, stockholders' deficit and cash flows for each of the two years in
the period ended December 31, 2003. 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 audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. 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 audits provide 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 Network Installation
Corporation and subsidiary as of December 31, 2003 and the results of its
operations and its cash flows for each of the two years in the period ended
December 31, 2003, in conformity with accounting principles generally accepted
in the United States of America.

The Company's consolidated financial statements are prepared using the generally
accepted accounting principles applicable to a going concern, which contemplates
the realization of assets and liquidation of liabilities in the normal course of
business. The Company has accumulated deficit of $5,466,840 including net losses
of $3,434,607 and $109,806 for the years ended December 31, 2003 and 2002,
respectively. These factors as discussed in Note 3 to the financial statements
raise substantial doubt about the Company's ability to continue as a going
concern. Management's plans in regard to these matters are also described in
Note 3. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.

KABANI & COMPANY, INC.
CERTIFIED PUBLIC ACCOUNTANTS
Fountain Valley, California
March 12, 2004

NETWORK INSTALLATION CORP. AND SUBSIDIARIES

TABLE OF CONTENTS
(for the twelve months ended December 31, 2003)

PAGE

CONSOLIDATED BALANCE SHEETS F-1

CONSOLIDATED STATEMENTS OF OPERATIONS F-2

STATEMENT OF STOCKHOLDERS' DEFICIT F-3

CONSOLIDATED STATEMENTS OF CASH FLOWS F-4

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS F5-F16

NETWORK INSTALLATION CORP.
(FORMERLY, FLEXXTECH CORPORATION)
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 2003

ASSETS

Current Assets:
Cash and cash equivalents . . . . . . . . . . . . $ 667
Accounts receivable, net. . . . . . . . . . . . . 353,119
Work in progress . . . . . . . . . . . . . . . . . 200,000
Other current assets. . . . . . . . . . . . . . . 2,289
------------
Total Current assets. . . . . . . . . . . . . . . . . . . 556,075

Property and Equipment, net. . . . . . . . . . . . . . . . . . . 6,898

------------
TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . $ 562,973
============

LIABILITIES & STOCKHOLDERS' DEFICIT

Current Liabilities:
Accounts payable and accrued expenses . . . . . . $ 1,532,893
Deferred revenue. . . . . . . . . . . . . . . . . 280,924
Loans payable . . . . . . . . . . . . . . . . . . 45,500
Loans payable related parties . . . . . . . . . . 163,691
Due to factor . . . . . . . . . . . . . . . . . . 14,056
Convertible debt - current. . . . . . . . . . . . 517,616
------------
Total Current Liabilities . . . . . . . . . . . . . . . . 2,554,680

Long-term Liabilities:
Loans Payable . . . . . . . . . . . . . . . . . . 65,000
Loans payable related parties . . . . . . . . . . 35,000
Convertible debt. . . . . . . . . . . . . . . . . 165,000
Convertible debt -related parties . . . . . . . . 338,000
------------
Total Long-term Liabilities . . . . . . . . . . . . . . . 603,000

STOCKHOLDERS' DEFICIT
Common stock, authorized 100,000,000 shares at $.001 par
value, issued and outstanding 12,616,330 shares. . 12,616
Additional paid in capital. . . . . . . . . . . . . . . 2,743,222
Shares to be issued . . . . . . . . . . . . . . . . . . 116,295
Accumulated deficit . . . . . . . . . . . . . . . . . . (5,466,840)
------------
Total Stockholders' Deficit . . . . . . . . . . . . (2,594,707)
------------

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT. . . . . . . . . . . $ 562,973
============
The accompanying notes are an integral part of these financial statements.

F-1

NETWORK INSTALLATION CORP.
(FORMERLY, FLEXXTECH CORPORATION)
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002

2003 2002
------------ -----------
NET REVENUE. . . . . . . . . . . . . . . . . . . . . . $ 1,233,908 $ 804,080

COST OF REVENUE. . . . . . . . . . . . . . . . . . . . 965,569 568,444
------------ -----------

GROSS PROFIT . . . . . . . . . . . . . . . . . . . . . 268,339 235,636

OPERATING EXPENSES . . . . . . . . . . . . . . . . . . 2,306,744 340,267

------------ -----------
LOSS FROM OPERATIONS . . . . . . . . . . . . . . . . . (2,038,405) (104,631)

Other income (expense)
Loss on conversion of debentures. . . . . . . . . . (91,110) -
Interest expense . . . . . . . . . . . . . . . . . (1,303,492) (4,375)
------------ -----------
Total other income (expense). . . . . . . . (1,394,602) (4,375)
------------ -----------
LOSS BEFORE INCOME TAXES . . . . . . . . . . . . . . . (3,433,007) (109,006)

Provision of Income taxes. . . . . . . . . . . . . . . 1,600 800

------------ -----------
NET LOSS . . . . . . . . . . . . . . . . . . . . . . . $(3,434,607) $ (109,806)
============ ===========

BASIC AND DILUTED NET LOSS PER SHARE:* . . . . . . . . $ (.34) $ (.01)
============ ===========

Basic and diluted weighted average shares outstanding. 10,151,468 7,382,000
============ ===========

* The basic and diluted net loss per share has been restated to retroactively
effect a 200:1 reverse stock split at January 23, 2003

Weighted average number of shares used to compute basic and diluted loss per
share is the same since the effect of dilutive securities is anti-dilutive.

The accompanying notes are an integral part of these financial statements.

F-2

NETWORK INSTALLATION CORPORATION
STATEMENTS OF STOCKHOLDERS' DEFICIT
DECEMBER 31, 2003

COMMON STOCK
------------ TOTAL
NUMBER OF ADDITIONAL SHARES ACCUMULATED STOCKHOLDERS'
SHARES AMOUNT PAID IN CAPITAL TO BE ISSUED DEFICIT DEFECIT
------------ ------- ----------------- ------------- ----------------------------
BALANCE AT JANUARY 1, 2002. . . . . . . . 7,382,000 $10,000 $ - $ - $ (245,727) $ (235,727)

Recapitalization upon reverse acquisition 2,943,407 325 (74,326) 16,900 (1,826,558) (1,883,659)

Distribution. . . . . . . . . . . . . . . - - - - (34,142) (34,142)

Net loss for the year 2002. . . . . . . . - - - - (109,806) (109,806)
------------ ------- ----------------- ------------- ------------- ---------------

BALANCE AT DECEMBER 31, 2002. . . . . . 10,325,407 10,325 (74,326) 16,900 (2,216,223) (2,263,334)

Issuance of common stock
for consulting services. . . . . . . . . 275,000 275 278,475 278,750
Issuance of common stock
to directors for compensation. . . . . . 400,000 400 610,400 610,800
Issuance of common stock
on conversion of debentures. . . . . . . 65,923 66 158,641 158,707
Issuance of common stock
for incentive for debentures . . . . . . 1,550,000 1,550 1,198,150 1,199,700
Beneficial conversion
feature of debentures. . . . . . . . . . 134,000 134,000
Issuance of stock warrants
for consulting services. . . . . . . . . 289,967
Dividend to officer of the Company 184,000 184,000
Contributions to equity
of subsidiary . . . . . . . . . . . . . 147,915 147,915
Conversion of debentures . . . . . . . . 99,395 99,395
Net loss for the year 2003 . . . . . . . (3,434,607) (3,434,607)
------------ ------- ----------------- ------------- ------------- ---------------
BALANCE AT DECEMBER 31, 2003. . . . 12,616,330 $12,616 $ 2,743,222 116,295 $(5,466,840) $ (2,884,674)
============ ======= ============== ============ =========== ===========
The accompanying notes are an integral part of these financial statements.

F-3

NETWORK INSTALLATION CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
DECEMBER 31, 2003

2003 2002
------------ ----------

CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(3,434,607) $(109,806)
Adjustments to reconcile net loss to net cash provided by (used in)
operating activities:
Depreciation and amortization. . . . . . . . . . . . . . . . . . . . 3,364 3,355
Issuance of stocks for consulting services, compensation & interest. 2,089,250 -
Issuance of stock warrants for consulting services. . . . . . . . . 289,967
Loss on settlement/conversion of debt. . . . . . . . . . . . . . . . 91,110 -
Beneficial conversion feature of debentures. . . . . . . . . . . . . (134,000) -
(Increase) / decrease in current assets
Accounts receivable. . . . . . . . . . . . . . . . . . . . . . (353,119) 50,219
Work in progress . . . . . . . . . . . . . . . . . . . . . . . (200,000)
Deposits & other current assets . . . . . . . . . . . . . . . (969) -
Increase in current liabilities
Accrued expenses & accounts payable. . . . . . . . . . . . . . 901,624 99,816
------------ ----------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES . . . . . . (747,380) 43,584
------------ ----------

CASH FLOWS FROM INVESTING ACTIVITIES
Cash balance with disposed subsidiary . . . . . . . . . . . . . . . - (5,700)
Cash received in acquisition of subsidiary. . . . . . . . . . . . . 667 -
------------ ----------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES . . . . . . 667 (5,700)
------------ ----------

CASH FLOWS FROM FINANCING ACTIVITIES
Distribution to officer of the subsidiary . . . . . . . . . . . . . 184,000 (34,142)
Proceeds from factor. . . . . . . . . . . . . . . . . . . . . . . . 14,056 -
Proceeds from shares to be issued . . . . . . . . . . . . . . . . . 147,915 -
Proceeds from related party debts . . . . . . . . . . . . . . . . . 80,691 -
Proceeds from borrowings. . . . . . . . . . . . . . . . . . . . . . 303,399 -
------------ ----------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES. . . . . . . 730,061 (34,142)
------------ ----------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS . . . . . . . . . . . (16,652) 3,742

CASH AND CASH EQUIVALENTS -BEGINNING . . . . . . . . . . . . . . . . . . . 17,319 13,577
------------ ----------

CASH AND CASH EQUIVALENTS -ENDING. . . . . . . . . . . . . . . . . . . . . $ 667 $ 17,319
============ ==========
The accompanying notes are an integral part of these financial statements.

F-4

NETWORK INSTALLATION CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. DESCRIPTION OF BUSINESS AND SEGMENTS
Network Installation Corp (NIC) was incorporated on July 18, 1997, under the
laws of the State of California. NIC is a full service computer cabling,
networking and telecommunications integrator contractor, providing networks from
stem to stem in house. NIC participates in the worldwide network infrastructure
market to end users, structured cabling market and the telephony services. NIC
and Flexxtech are together referred as "the Company".

Pursuant to a purchase agreement on May 23, 2003, Flexxtech Corporation
("Flexxtech") acquired 100% of the issued and outstanding common stock of (NIC).
The purchase price consisted of $50,000 cash, 7,382,000 shares of Flexxtech's
common stock and five year option to purchase an additional 618,000 shares of
Flexxtech stock if NIC's total revenue exceeds $450,000 for the period beginning
on June 1, 2003 and ending August 31. The option was exercisable at a price
equal to the closing bid price of the stock on August 31, 2003. Although the
Company's revenue exceeded $450,000 during that period, on April 15, 2004
Cummings agreed to forgive and retire the option.

According to the terms of the share exchange agreement, control of the combined
companies (the "Company") passed to the former shareholders of NIC. This type of
share exchange has been treated as a capital transaction accompanied by
recapitalization of NIC in substance, rather than a business combination, and is
deemed a "reverse acquisition" for accounting purposes since the former owners
of NIC controlled majority of the total common shares outstanding immediately
following the acquisition. No pro forma financial statements are being presented
as Flexxtech had no significant asset prior to the acquisition.

Flexxtech Corporation ("Flexxtech") was organized on March 24, 1998, under the
laws of the State of Nevada, as Color Strategies. On December 20, 1999,
Flexxtech changed its name to Infinite Technology Corporation. Flexxtech changed
its name to Flexxtech Corporation in April 2000.

A certificate of amendment was filed on July 10, 2003 to change the parent
company's name from Flexxtech Corporation to Network Installation Corp.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES PRINCIPLES OF CONSOLIDATION

The accompanying financial statements include the accounts of Network
Installation Corp., formerly Flexxtech Corporation (legal acquirer, the
"Parent"), and its 100% owned subsidiary, Network Installation Corporation. All
significant inter-company accounts and transactions have been eliminated in
consolidation. The historical results for the year ended December 31, 2003
include the accounts of NIC for the full year and Flexxtech from the acquisition
date through December 31, 2003, while the historical results for the year ended
December 31, 2002 include NIC only.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

F-5

CASH AND CASH EQUIVALENTS

The Company considers all liquid investments with a maturity of three months or
less from the date of purchase that are readily convertible into cash to be cash
equivalents.

ACCOUNTS RECEIVABLE

The Company maintains reserves for potential credit losses on accounts
receivable. Management reviews the composition of accounts receivable and
analyzes historical bad debts, customer concentrations, customer credit
worthiness, current economic trends and changes in customer payment patterns to
evaluate the adequacy of these reserves. Reserves are recorded primarily on a
specific identification basis. Allowance for doubtful debts amounted to $79,309
as at December 31, 2003.

WORK IN-PROGRESS

Work in-progress represents cost incurred on uncompleted contracts. Cost
consists of labor and direct costs incurred on the contract. Work in progress at
December 31, 2003 amounted to $200,000.

PROPERTY & EQUIPMENT

Property and equipment are stated at cost. Expenditures for maintenance and
repairs are charged to earnings as incurred; additions, renewals and betterments
are capitalized. When property and equipment are retired or otherwise disposed
of, the related cost and accumulated depreciation are removed from the
respective accounts, and any gain or loss is included in operations.
Depreciation of property and equipment is provided using the straight-line
method for substantially all assets with estimated lives of five to seven years.

LONG-LIVED ASSETS

Effective January 1, 2002, the Company adopted Statement of Financial Accounting
Standards No. 144, "Accounting for the Impairment or Disposal of Long-Lived
Assets" ("SFAS 144"), which addresses financial accounting and reporting for the
impairment or disposal of long-lived assets and supersedes SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of," and the accounting and reporting provisions of APB Opinion No.
30, "Reporting the Results of Operations for a Disposal of a Segment of a
Business." The Company periodically evaluates the carrying value of long-lived
assets to be held and used in accordance with SFAS 144. SFAS 144 requires
impairment losses to be recorded on long-lived assets used in operations when
indicators of impairment are present and the undiscounted cash flows estimated
to be generated by those assets are less than the assets' carrying amounts. In
that event, a loss is recognized based on the amount by which the carrying
amount exceeds the fair market value of the long-lived assets. Loss on
long-lived assets to be disposed of is determined in a similar manner, except
that fair market values are reduced for the cost of disposal. Based on its
review, the Company believes that, as of December 31, 2003 and 2002, there were
no significant impairments of its long-lived assets.

F-6

REVENUE RECOGNITION & DEFERRED REVENUE

The Company's revenue recognition policies are in compliance with all applicable
accounting regulations, including American Institute of Certified Public
Accountants (AICPA) Statement of Position (SOP) 81-1, Accounting for Performance
of Construction-Type and Certain Production-Type Contracts. Revenues from
installations, cabling and networking contacts are recognized when the contracts
are completed (Completed-Contract Method). The completed-contract method is used
because the contracts are short-term in duration or the Company is unable to
make reasonably dependable estimates of the costs of the contracts.

Under the Completed-Contract Method, revenues and expenses are recognized when
services have been performed and the projects have been completed. For projects,
which have been completed but not yet billed to customers, revenue is recognized
based on management's estimates of the amounts to be realized. When such
projects are billed, any differences between the initial estimates and the
actual amounts billed are recorded as increases or decreases to revenue.
Expenses are recognized in the period in which the corresponding liability is
incurred. Deferred revenue represents revenue that has been received or is
receivable before it is earned, i.e., before the related services are performed.
Deferred revenue amounted to $280,924 at December 31, 2003.

The Company's revenue recognition policy for sale of network products is in
compliance with Staff accounting bulletin (SAB) 104. Revenue from the sale of
network products is recognized when a formal arrangement exists, the price is
fixed or determinable, the delivery is completed and collectibility is
reasonably assured. Generally, the Company extends credit to its customers and
does not require collateral. The Company performs ongoing credit evaluations of
its customers and historic credit losses have been within management's
expectations.

ADVERTISING

The Company expenses advertising costs as incurred. Advertising expenses for the
year ended December 31, 2003 and 2002 were insignificant.

ISSUANCE OF SHARES FOR SERVICE

The Company accounts for the issuance of equity instruments to acquire goods and
services based on the fair value of the goods and services or the fair value of
the equity instrument at the time of issuance, whichever is more reliably
measurable.

STOCK-BASED COMPENSATION

In October 1995, the FASB issued SFAS No. 123, "Accounting for Stock-Based
Compensation". SFAS No. 123 prescribes accounting and reporting standards for
all stock-based compensation plans, including employee stock options, restricted
stock, employee stock purchase plans and stock appreciation rights. SFAS No. 123
requires compensation expense to be recorded (i) using the new fair value method
or (ii) using the existing accounting rules prescribed by Accounting Principles
Board Opinion No. 25, "Accounting for stock issued to employees" (APB 25) and
related interpretations with proforma disclosure of what net income and earnings
per share would have been had the Company adopted the new fair value method. The
Company uses the intrinsic value method prescribed by APB 25 and has opted for
the disclosure provisions of SFAS No.123.

INCOME TAXES

Deferred income tax assets and liabilities are computed annually for differences
between the financial statements and tax basis of assets and liabilities that
will result in taxable or deductible amounts in the future based on enacted laws
and rates applicable to the periods in which the differences are expected to
affect taxable income (loss). Valuation allowance is established when necessary
to reduce deferred tax assets to the amount expected to be realized.

F-7

BASIC AND DILUTED NET LOSS PER SHARE

Net loss per share is calculated in accordance with the Statement of financial
accounting standards No. 128 (SFAS No. 128), "Earnings per share". SFAS No. 128
superseded Accounting Principles Board Opinion No.15 (APB 15). Net loss per
share for all periods presented has been restated to reflect the adoption of
SFAS No. 128. Basic net loss per share is based upon the weighted average number
of common shares outstanding. Diluted net loss per share is based on the
assumption that all dilutive convertible shares and stock options were converted
or exercised. Dilution is computed by applying the treasury stock method. Under
this method, options and warrants are assumed to be exercised at the beginning
of the period (or at the time of issuance, if later), and as if funds obtained
thereby were used to purchase common stock at the average market price during
the period.

SEGMENT REPORTING

Statement of Financial Accounting Standards No. 131 ("SFAS 131"), "Disclosure
About Segments of an Enterprise and Related Information" requires use of the
"management approach" model for segment reporting. The management approach model
is based on the way a company's management organizes segments within the company
for making operating decisions and assessing performance. Reportable segments
are based on products and services, geography, legal structure, management
structure, or any other manner in which management disaggregates a company. SFAS
131 has no effect on the Company's consolidated financial statements as
substantially all of the Company's operations are conducted in one industry
segment.

FAIR VALUE OF FINANCIAL INSTRUMENTS

Statement of Financial Accounting Standard No. 107, "Disclosures About Fair
Value of Financial Instruments", requires that the Company disclose estimated
fair values of financial instruments. The carrying amounts reported in the
statements of financial position for current assets and current liabilities
qualifying as financial instruments are a reasonable estimate of fair value.

RISKS AND UNCERTAINTIES

VULNERABILITY DUE TO SUPPLIER CONCENTRATIONS - The Company had three major
sources for the supply of materials and one major source for supply of
subcontracted labor in 2003. The Company had a major source for the supply of
materials in 2002. The percentages of purchases from this source were 64% and
94% of total purchases in the year ended December 31, 2003 and 2002,
respectively. Total outstanding balances due to these suppliers as of December
31, 2003 and 2002 were $222,339 and $84,452, respectively. The effect of the
loss of any of these sources or a disruption in their business will depend
primarily upon the length of time necessary to find a suitable alternative
source and could have a material adverse effect on the Company's results of
operations.

VULNERABILITY DUE TO CUSTOMER CONCENTRATIONS - Total sales to two major
customers in the year ended December 31, 2003 amounted to approximately $692,535
and to three major customers in the year ended December 31, 2002 amounted to
$428,000. There was receivable balance of $58,338 from these customers as of
December 31, 2003 and $-0- as of December 31, 2002.

F-8

RECENT PRONOUNCEMENTS

On April 30, 2003, the FASB issued FASB Statement No. 149 ("SFAS 149"),
"Amendment of Statement 133 on Derivative Instruments and Hedging Activities".
FAS 149 amends and clarifies the accounting guidance on (1) derivative
instruments (including certain derivative instruments embedded in other
contracts) and (2) hedging activities that fall within the scope of FASB
Statement No. 133 ("SFAS 133"). Accounting for Derivative Instruments and
Hedging Activities. SFAS 149 also amends certain other existing pronouncements,
which will result in more consistent reporting of contracts that are derivatives
in their entirety or that contain embedded derivatives that warrant separate
accounting. SFAS 149 is effective (1) for contracts entered into or modified
after June 30, 2003, with certain exceptions, and (2) for hedging relationships
designated after June 30, 2003. The guidance is to be applied prospectively. The
adoption of SFAS No. 149 does not have a material impact on the Company's
financial position or results of operations or cash flows.

On May 15 2003, the FASB issued FASB Statement No. 150 ("SFAS 150"), Accounting
for Certain Financial Instruments with Characteristics of both Liabilities and
Equity. SFAS 150 changes the accounting for certain financial instruments that,
under previous guidance, could be classified as equity or "mezzanine" equity, by
now requiring those instruments to be classified as liabilities (or assets in
some circumstances) in the statement of financial position. Further, SFAS 150
requires disclosure regarding the terms of those instruments and settlement
alternatives. SFAS 150 affects an entity's classification of the following
freestanding instruments: a) Mandatorily redeemable instruments; b) Financial
instruments to repurchase an entity's own equity instruments; c) Financial
instruments embodying obligations that the issuer must or could choose to settle
by issuing a variable number of its shares or other equity instruments based
solely on (i) a fixed monetary amount known at inception or (ii) something other
than changes in its own equity instruments; and d) SFAS 150 does not apply to
features embedded in a financial instrument that is not a derivative in its
entirety. The guidance in SFAS 150 is generally effective for all financial
instruments entered into or modified after May 31, 2003, and is otherwise
effective at the beginning of the first interim period beginning after June 15,
2003. For private companies, mandatorily redeemable financial instruments are
subject to the provisions of SFAS 150 for the fiscal period beginning after
December 15, 2003. The adoption of SFAS No. 150 does not have a material impact
on the Company's financial position or results of operations or cash flows.
In December 2003, the Financial Accounting Standards Board (FASB) issued a
revised Interpretation No. 46, "Consolidation of Variable Interest Entities"
(FIN 46R). FIN 46R addresses consolidation by business enterprises of variable
interest entities and significantly changes the consolidation application of
consolidation policies to variable interest entities and, thus improves
comparability between enterprises engaged in similar activities when those
activities are conducted through variable interest entities. The Company does
not hold any variable interest entities.

3. GOING CONCERN

The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles which contemplate continuation of the
Company as a going concern. However, the Company has accumulated deficit of
$5,466,840 including net losses of $3,434,607 and $109,806 for the years ended
December 31, 2003 and 2002, respectively. The continuing losses have adversely
affected the liquidity of the Company. The Company faces continuing significant
business risks, including but not limited to, its ability to maintain vendor and
supplier relationships by making timely payments when due.

F-9

In view of the matters described in the preceding paragraph, recoverability of a
major portion of the recorded asset amounts shown in the accompanying balance
sheet is dependent upon continued operations of the Company, which in turn is
dependent upon the Company's ability to raise additional capital, obtain
financing and to succeed in its future operations. The financial statements do
not include any adjustments relating to the recoverability and classification of
recorded asset amounts or amounts and classification of liabilities that might
be necessary should the Company be unable to continue as a going concern.
Management has taken the following steps to revise its operating and financial
requirements, which it believes are sufficient to provide the Company with the
ability to continue as a going concern. Management devoted considerable effort
during the year ended December 31, 2003, towards obtaining additional equity
financing through various private placements and evaluation of its distribution
and marketing methods.

4. PROPERTY AND EQUIPMENT

Property and equipment comprised of following on December 31, 2003:

Furniture & fixtures $ 3,160
Machinery & Equipment 10,800
------
13,960
Less Accumulated Depreciation (7,062)
-------
$ 6,898
=======

5. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consisted of following on December 31,
2003:

Accounts payable $ 655,334
Payroll tax payable 122,749
Litigation accrual 430,000
Accrued expenses 324,810
---------
$1,532,893
==========

Payroll tax liabilities amounting $92,890 pertains to the calendar years from
1999 to 2001. The Company has agreed to pay the payroll tax liability in monthly
installment of $6,500 beginning March 15, 2003 until entire amount is paid in
full.

F-10

6. NOTE PAYABLE

The Company has an unsecured note of $47,500, guaranteed by the officer and
shareholder of the Company, bearing an interest rate of prime plus 3.25%. The
note is payable through a revolving line of credit, which commenced on November
6, 2001, the date of the note, and expires three years following the note date.
The Company must pay a total of 36 payments of interest only on the disbursed
balance beginning one month from the note date and every month thereafter. The
term period will commence upon the termination of the revolving line of credit
period. During the term period, the Company must pay principal and interest
payments in equal installment sufficient to fully amortize the principal balance
outstanding, beginning one month from the commencement of the term period. All
remaining principal and accrued interest is due and payable seven years from
the date of the note.

As a result of acquisition of NIC by the Company, NIC was in default on this
note, since the note prohibited a change of ownership over 25% of NIC's common
stock outstanding. The entire principal amount became due upon default and the
revolving line of credit is no longer available to NIC. The Company is in the
process of making payment arrangement with the financing institution. The amount
outstanding at December 31, 2003, amounted to $45,500.

The interests on this note were $3,728 and $4,375 for the year ended December
31, 2003 and 2002, respectively.

The Company has unsecured, non-interest bearing notes for $65,000 due November
2005.

7. RELATED PARTY TRANSACTIONS RELATED PARTY NOTES PAYABLE - CURRENT

The Company has $3,500 payable based on the purchase agreement of the subsidiary
and an unsecured, non-interest bearing note for $84,191 due June 15, 2004, due
to an officer.

The Company entered a factoring agreement on September 17, 2003 with a related
party for $76,000 face amount. This amount is payable in 30 days and certain
receivables were assigned and delivered. In the event that on the maturity date,
any amounts on the note remain, the holder can exercise it's right to increase
the face amount by $10,000 per month that the note remains unpaid. In the event
of default the holder shall have the right to switch any remaining amount left
on the debenture to a 3 year, 10% interest bearing Convertible Debenture and the
Company must issue 100,000 shares per $10,000 invested in this debenture. The
principle amount was paid back in full by January 23, 2004.

RELATED PARTY NOTES PAYABLE - LONG TERM

The Company has an unsecured, non-interest bearing note for $35,000 due December
17, 2005 due to the majority shareholder.

F-11

8. INCOME TAXES

No provision was made for Federal income tax since the Company has significant
net operating loss. Through December 31, 2003, the Company incurred net
operating losses for tax purposes of $3,450,000, approximately. The net
operating loss carry forwards may be used to reduce taxable income through the
year 2022. The availability of the Company's net operating loss carryforwards
are subject to limitation if there is a 50% or more positive change in the
ownership of the Company's stock. The provision for income taxes consists of the
state minimum tax imposed on corporations.

Temporary differences which give rise to deferred tax assets and liabilities at
December 31, 2003 comprised mainly of net operating loss carryforward. The gross
deferred tax asset balance as of December 31, 2003 was approximately $1,380,000.

A 100% valuation allowance has been recorded for the deferred tax assets due to
the uncertainty of its realization.

The following is a reconciliation of the provision for income taxes at the U.S.
federal income tax rate to the income taxes reflected in the Consolidated
Statements of Operations:

December 31, December 31,
2003 2002
------------------- -------------

Tax expense (credit) at statutory rate-federal (34)% (34)%
State tax expense net of federal tax ( 6) ( 6)
Permanent differences 1 1
Changes in valuation allowance (39) (39)
------------------- -------------
Tax expense at actual rate - - .
=================== =============

9. COMMITMENT & LITIGATION

Lease:

The Company did not have a lease agreement during the year ended December 31,
2002. The Company paid the usage charge each month. On February 5, 2003, the
Company entered into short term rental agreement for 90 days and month to month
thereafter. The monthly rental is $2,289.

The rent expenses were $27,452 and $ 12,323 for the year ended December 31, 2003
and 2002, respectively.

Litigation:

In the year ended December 31, 2002, a suit was brought against the Company and
its former management in the Superior Court of the State of California, County
of San Francisco, by an individual alleging that the Company made false written
and oral representations to induce the plaintiff to invest in the Company and
that such investment occurred despite the plaintiff's request that the funds be
held in a brokerage account maintained by a related entity. A co-defendant, an
individual in the case also filed a cross-complaint in the action alleging
theories of recovery against the Company and several other defendants and
alleging fraud, breach of contract, misrepresentation, conversion and securities
fraud against the Company. On November 21, 2003, the Company reached a
settlement with the plaintiffs for $160,000. The Company is making payments in
installments through April 2004. The Company has accrued $300,000 in the
accompanying financial statements against any possible outcome.

F-12

On April 25, 2003 the Superior Court of the State of California, County of
Orange, entered a judgment in the amount of $46,120 against the Company and its
former management in favor of a vendor of the Company's former subsidiary, North
Texas Circuit Board, or NTCB. On August 20, 2002 the Company sold NTCB to BC
Electronics Inc. Pursuant to terms of the share purchase agreement, BC
Electronics assumed all liabilities of NTCB. In December 2003, the Company filed
a motion to vacate the judgment for lack of personal service. In February 2004,
the Court ruled in favor of the Company and the judgment was vacated. Although
the Company was the guarantor on the loan, NTCB is the principal debtor and (i)
the Company will bring action against NTCB to seek relief or (ii) because
partial payment was made by NTCB, it could affect the legal status of the
guarantee, which the Company believes may absolve it of liability. In February
2004, the plaintiff refiled the complaint. Although the Company will continue to
oppose the action the Company and its current management have begun settlement
discussions with the plaintiff.

On April 29, 2003 a suit was brought against the Company by an investor,
alleging breach of contract pursuant to a settlement agreement executed between
the Company and investor dated November 20, 2002. The suit alleges that the
Company is delinquent in its repayment of a $20,000 promissory note, of which
$5,000 has been repaid to date. Although management of the Company intends to
oppose the claims, the Company's current management plans to begin settlement
discussion with the plaintiff.

The Company may be involved in litigation, negotiation and settlement matters
that may occur in the day-to-day operations of the Company and its subsidiary.
Management does not believe implication of these litigations will have any other
material impact on the Company's financial statements.

10. DUE TO FACTOR

On February 27, 2003, NIC entered into a factoring and security agreement to
sell, transfer and assign certain accounts receivable to Orange Commercial
Credit (OCC). OCC may on its sole discretion purchase any specific account. All
accounts sold are with recourse on seller. All of the Company's property of NIC
including accounts receivable, inventories, equipment and promissory notes are
collateral under this agreement. OCC will advance 80% of the face amount of each
account. The difference between the face amount of each purchased account and
advance on the purchased account shall be reserve and will be released after
deductions of discount and charge backs on the 15th and the last day of each
month. OCC charges 1% of gross face value of purchased receivable for finance
charge and 1% for administrative fees with minimum charge of $750 on each
settlement date. As of December 31, 2003, the Company factored receivables of
approximately $205,929. In connection with the factoring agreement, the Company
included fees of $16,555 in the period ended December 31, 2003. Due to factor
amounted to $14,056 as of December 31, 2003.

11. STOCKHOLDERS' EQUITY

During the year ended December 31, 2003, the Company issued stocks at various
times, as described per the following. The stocks were valued at the average
fair market value of the freely trading shares of the Company as quoted on OTCBB
on the date of issuance.

STOCK SPLIT

On January 23, 2003, the Company announced a 1 for 200 reverse stock split of
its common stock. All fractional shares are rounded up and the authorized shares
remain the same. The financial statements have been retroactively restated for
the effects of stock splits.

F-13

EQUITY:

During the year ended December 31, 2003, the Company issued common stock as
follows:

7,382,000 shares of common stock valued at $1,107,300 were issued for
acquisition of its subsidiary, Network Installation Corporation.

The Company issued 400,000 shares of common stock to directors for directors'
fees amounting $610,800.

The Company issued 275,000 shares of common stock to the major shareholder for
consulting services amounting $278,750.

The Company issued 65,923 shares of common stock valued at $158,707 for
conversion of debenture amount of $98,967 to a related party, a major
shareholder of the Company. The difference of the value of the stock issued and
debenture amount of $59,740 was charged as a loss on conversion.

The Company was to issue 31,129 shares of common stock valued at $99,395 for
conversion of debenture amount of $68,025 to a related party, a major
shareholder of the Company. The Company had not issued the stock as of December
31, 2003. The difference of the value of the stock to be issued and debenture
amount of $31,370 was charged as a loss on conversion.

The Company issued 1,550,000 shares to the major shareholder in 2003 as
incentive per the debenture agreement, valued at $1,199,700. The Company
recorded such issuance as interest in the accompanying consolidated financial
statement.

The Company had distributions to a major shareholder and the officer of the
Company amounting $110,794 in the year ended December 31, 2003. The Company had
a receivable from a major shareholder and the officer of the Company amounting
$73,206. The amount was considered as uncollectible and was recorded as deemed
dividend in the year ended December 31, 2003.

The Company had contributions to equity of NIC, the wholly owned subsidiary, of
$147,915 in the year ending December 31, 2003.

During the year ended December 31, 2002, NIC, the wholly owned subsidiary
distributed $34,142 as dividends.

CONVERTIBLE DEBENTURES:

In the year ended December 31, 2001, the company issued debentures amounting
$720,000, carrying an interest rate of 6% per annum, due in August 2003. The
holders are entitled to, at any time or from time to time, convert the
conversion amount into shares of common stock of the Company, par value $.001
per share at a conversion price for each share of common stock equal to the
lower of (a) 120% of the closing bid price per share (as reported by Bloomberg,
LP) on the closing date, and (b) 80% of the lowest closing bid price per share
(as reported by Bloomberg, LP) of the Company's common stock for the five
trading days immediately preceding the date of conversion. The Company recorded,
in accordance with EITF 00-27 and 98-5, a beneficial conversion feature on the
issuance of the convertible debentures amounting $180,000 reflected in the
interest expense in the financial statement. As of March 31, 2004, the
outstanding balance of the debentures amounted to $0.

F-14

On April 7, 2003, in connection with the recession agreement (note 12), the
Company issued convertible debentures of $140,000 to various parties. The
Company has recorded the debentures as recession cost in the financial
statements at December 31, 2002. The Holder of the debentures is entitled to
convert the face amount of this Debenture, plus accrued interest, anytime
following the Restricted Period, at the lesser of (i) 75% of the lowest closing
bid price during the fifteen (15) trading days prior to the Conversion Date or
(ii) 100% of the average of the closing bid prices for the twenty (20) trading
days immediately preceding the Closing Date ("Fixed Conversion Price"), each
being referred to as the "Conversion Price". No fractional shares or scrip
representing fractions of shares will be issued on conversion, but the number of
shares issuable shall be rounded up or down, as the case may be, to the nearest
whole share. The Debentures shall pay six percent (6%) cumulative interest, in
cash or in shares of common stock, par value $.001 per share, of the Company
("Common Stock"), at the Company's option, at the time of each conversion. The
debentures are payable on April 8, 2008.

During the period ending June 30, 2003, the Company issued debentures amounting
$105,000 to a major shareholder of the Company and $25,000 to another party,
carrying an interest rate of 6% per annum, due in April to June 2008. The face
amount of this Debenture may be converted, in whole or in art, any time
following the Closing Date. Holder is entitled to convert the face amount of
this Debenture, plus accrued interest, anytime following the Closing Date, at
the lesser of (i) 75% of the lowest closing bid price during the fifteen (15)
trading days prior to the Conversion Date or (ii) 100% of the average of the
closing bid prices for the twenty (20) trading days immediately preceding the
Closing Date ("Fixed Conversion Price"), each being referred to as the
"Conversion Price". No fractional shares or scrip representing fractions of
shares will be issued on conversion, but the number of shares issuable shall be
rounded up or down, as the case may be, to the nearest whole share.
In connection with issuance of debentures, the Company issued 250,000 shares of
common stock to an unrelated party and 800,000 shares of common stock to a
related party. The shares issued to the unrelated party were recorded as
debenture issuance cost up-to the amount of debenture amounting $25,000. The
debentures have been presented net of debentures issuance cost in the financial
statements. The shares issued to the related party have been recorded as deemed
dividends amounting to $120,000. The valuation of shares was based upon average
fair market value of the freely trading shares of the Company as quoted on OTCBB
on the date of issuance.

The Company has recorded, in accordance with EITF 00-27 and 98-5, a beneficial
conversion feature on the issuance of the convertible debentures in the year
ended December 30, 2003, an amount of $134,000, reflected in the financial
statement as interest expense.

During the period ended December 31, 2003, the Company issued $233,000
debentures to a major shareholder of the Company. These debentures carry an
interest rate of 6% per annum, due in July to October 2008. The face amount of
these Debentures may be converted, in whole or in part, any time following the
Closing Date. Holder is entitled to convert the face amount of this Debenture,
plus accrued interest, anytime following the Closing Date, at the lesser of (i)
75% of the lowest closing bid price during the fifteen (15) trading days prior
to the Conversion Date or (ii) 100% of the average of the closing bid prices for
the twenty (20) trading days immediately preceding the Closing Date ("Fixed
Conversion Price"), each being referred to as the "Conversion Price". No
fractional shares or scrip representing fractions of shares will be issued on
conversion, but the number of shares issuable shall be rounded up or down, as
the case may be, to the nearest whole share.

F-15

The Company issued 1,550,000 shares to the major shareholder per a debenture
agreement. Per the agreement, the Company was required to issue one hundred
thousand (100,000) shares of its common stock to holder, for each ten thousand
dollars ($10,000) invested. The Company recorded stock issued amounting
$1,199,700 as interest expense in the accompanying financial statements.

CONVERTIBLE PROMISSORY NOTES PAYABLE

In the year ended December 31, 2001, the Company issued convertible promissory
notes of $100,000 due on April 1, 2004, carrying an interest rate of 10% per
annum. The holder of $100,000 promissory notes is entitled to convert the
conversion amount into shares of common stock of the Company, par value $.001,
at any time, per share at a conversion price for each share of common stock
equal $7.00 per share of common stock. The note is secured and collateralized by
shares of common stock of the Company at one share per every five dollars
($5.00) of the principal.

STOCK OPTION

During the year ended December 31, 2003, the company issued options to acquire
300,000 shares of the company's common stock to an employee. The weighted
average grant date fair value, stock price and exercise price of the options
were $1.82, $2.95 and $2.65, respectively. On November 30, 2003, the board of
directors agreed to terminate the vested option incentive for the employee
valued at $6,987. As of December 31, 2003, there are no stock options
outstanding.

During the year ended December 31, 2003, the Company issued warrants to purchase
200,000 shares to consultants for services. The Company recorded a consulting
expense amounting to $290,000 which represents the fair value of the vested
portion of the warrants calculated using the Black- Schoels option pricing model
with the following assumptions:

Expected life (years) 2-5 years
Risk-free interest rate 3.0%
Dividend yield -
Volatility 100%

The weighted average stock price, exercise price, fair value of warrants at the
grant date issued to consultants was $3.13, $4.75 and $1.80. At December 31,
2003, 114,583 of these warrants were exercisable. The weighted average remaining
life of these warrants at December 31, 2003 was 3.73 years.

12. BASIC AND DILUTED NET LOSS PER SHARE Basic and diluted net loss per share
for the twelve-month period ended December 31, 2003 and 2002 were determined by
dividing net loss for the periods by the weighted average number of basic and
diluted shares of common stock outstanding. Weighted average number of shares
used to compute basic and diluted loss per share is the same since the effect of
dilutive securities is anti-dilutive.

13. SUPPLEMENTAL DISCLOSURE OF CASH FLOWS
The Company prepares its statements of cash flows using the indirect method as
defined under the Financial Accounting Standard No. 95.
The Company paid interest of $-0- and $3,526 during the year ended December 31,
2003 and 2002, respectively. The Company paid income taxes of $-0- during the
years ended December 31, 2003 and 2002.

F-16

14. SUBSEQUENT EVENTS

ACQUISITION:

Pursuant to an acquisition agreement, the Company acquired 100% of the
outstanding shares of San Diego area-based telecommunication solutions firm Del
Mar Systems International, Inc. (Del Mar) for $1 million structured as a (i)
$500,000 12 month 5% Note consisting of 12 equal monthly installments of $42,804
and (ii) $500,000 in shares of the Company's restricted common stock. Del Mar
will continue to operate as a wholly-owned subsidiary of the Company. The
financial information of Del Mar is not available through the date of these
financial statements as they were in process of being compiled.

PAYMENT OF RELATED PARTY LOAN:

The Company paid the $76,000 due to the majority shareholder by January 23,
2004, fulfilling its obligation on the note.

NETWORK INSTALLATION CORP. AND SUBSIDIARIES

TABLE OF CONTENTS
(for three months ended March 31, 2004)

PAGE

CONSOLIDATED BALANCE SHEETS F-17

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS F-18

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS F-19

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS F20-F27

NETWORK INSTALLATION CORP
CONSOLIDATED BALANCE SHEET

ASSETS
(Unaudited)
March 31,
2004

CURRENT ASSETS
Cash and cash equivalents . . . . . . . . . . . . . . . . $ -
Accounts receivable, net of allowance for doubtful
accounts of $80,000 at March 31, 2004 . . . . . . . . . . 80,946
Work in progress. . . . . . . . . . . . . . . . . . . . . 35,987

Prepaid expenses. . . . . . . . . . . . . . . . . . . . . 162,500
Other current assets. . . . . . . . . . . . . . . . . . . 4,461
----------

TOTAL CURRENT ASSETS. . . . . . . . . . . . . . . . . . . 283,894
----------

PROPERTY & EQUIPMENT, NET . . . . . . . . . . . . . . . . 4,648
----------

Goodwill. . . . . . . . . . . . . . . . . . . . . . . . . 1,000,000
----------

TOTAL ASSETS. . . . . . . . . . . . . . . . . . . . . . . $ 1,288,542
==========

LIABILITIES AND SHAREHOLDERS' DEFICIT

CURRENT LIABILITIES
Book Overdraft. . . . . . . . . . . . . . . . . . . . . . $ 17,271
Accounts payable and accrued expenses . . . . . . . . . . 1,191,384
Deferred revenue. . . . . . . . . . . . . . . . . . . . . 78,869
Loans payable . . . . . . . . . . . . . . . . . . . . . . 504,780
Loans payable - related parties . . . . . . . . . . . . . 134,180
Due to factor . . . . . . . . . . . . . . . . . . . . . . 10,759
Convertible debt - current. . . . . . . . . . . . . . . . 21,781
----------

TOTAL CURRENT LIABILITIES . . . . . . . . . . . . . . . . 1,959,024
----------

LONG TERM LIABILITIES
Loans payable . . . . . . . . . . . . . . . . . . . . . . 25,000
Convertible debt. . . . . . . . . . . . . . . . . . . . . 165,000
Convertible debt - related parties. . . . . . . . . . . . 753,500
----------

TOTAL LONG TERM LIABILITIES.. . . . . . . . . . . . . . . 943,500
-
------------
TOTAL LIABILITIES . . . . . . . . . . . . . . . . . . . . 2,902,524
----------

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' DEFICIT
Common stock, authorized 100,000,000 shares at $.001 par
value, issued and outstanding 12,960,857 shares . . . . . 12,962
Additional paid-in capital. . . . . . . . . . . . . . . . 4,269,734
Shares to be issued . . . . . . . . . . . . . . . . . . . 116,284
Accumulated deficit . . . . . . . . . . . . . . . . . . . (6,012,962)
----------

TOTAL SHAREHOLDERS' DEFICIT. . . . . . . . . . . . . . . . (1,613,982)
----------

TOTAL LIABILITIES AND SHAREHOLDERS'DEFICIT. . . . . . . . $ 1,288,542
==========
See notes to financial statements

F-17

NETWORK INSTALLATION CORP
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

March 31, March 31,
2004 2003
- -

NET REVENUE. . . . . . . . . . . . $ 510,522 $ 442,606

COST OF REVENUE. . . . . . . . . . 320,220 186,359
---------- ---------

GROSS PROFIT . . . . . . . . . . . 190,302 256,247

OPERATING EXPENSES . . . . . . . . 584,367 192,001
---------- ---------

INCOME (LOSS) FROM OPERATIONS. . . (394,065) 64,246

OTHER INCOME (EXPENSES)
Other income (expenses). . . . . . (667) -
Interest expense . . . . . . . . . (151,390) (1,094)
---------- ---------

TOTAL OTHER INCOME
(EXPENSES) . . . . . . . . . . . . (152,057) (1,094)
---------- ---------

INCOME (LOSS) BEFORE INCOME TAX. . (546,122) 63,152
---------- ---------

Provision of income taxes. . . . . - 800
---------- ---------

NET INCOME (LOSS). . . . . . . . . $ (546,122) $ 62,352
========== =========

BASIC AND DILUTED INCOME (LOSS)
PER SHARE. . . . . . . . . . . . . $ (0.04) $ 0.01
========== =========

WEIGHTED AVERAGE
NUMBER OF SHARES OUTSTANDING.. . . 12,709,532 7,382,000
========== =========
See notes to financial statements

F-18

NETWORK INSTALLATION CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

Three months ended
March 31, 2004 March 31, 2003
--------------- --------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) . . . . . . . . . . . . . $ (546,122) $ 62,352
Adjustment to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Issuance of stock for consulting
services . . . . . . . . . . . . . . . . . . 195,000 -
Beneficial conversion feature of debenture . 135,125 -
Depreciation and amortization. . . . . . . . 2,250 841
(Increase) decrease in current assets
Accounts receivable. . . . . . . . . . . . . 272,173 (334,696)
Work in progress . . . . . . . . . . . . . . 164,013 -
Prepaid Expenses . . . . . . . . . . . . . . (92,500) -
Deposit and other current assets . . . . . . (2,172) 2,289
Increase (Decrease) in current liabilities:
Accrued expenses and accounts payable. . . . (250,622) 219,574
Deferred revenue . . . . . . . . . . . . . . (202,055) -
------------- -------------

NET CASH PROVIDED BY (USED IN) OPERATING
ACTIVITIES. . . . (324,910) 54,218
------------- -------------

CASH FLOWS FROM FINANCING ACTIVITIES:
Bank overdraft . . . . . . . . . . . . . . . 17,271 -
Proceeds (payments to) from factor. . . . . (3,297) 48,992
Proceeds from borrowings . . . . . . . . . . 426,989 -
Payment on Note - (2,500)
Repayment of long term debt. . . . . . . . . (116,720) -
------------- -------------

NET CASH PROVIDED BY FINANCING ACTIVITIES. . 324,243 46,492
------------- -------------

NET DECREASE IN CASH &
CASH EQUIVALENTS. . . . . . . (667) (7,726)

CASH & CASH EQUIVALENTS AT BEGINNING OF PERIOD 667 17,319
------------- -------------

CASH & CASH EQUIVALENTS AT END OF PERIOD. . . $ - $ 9,593
============= =============
See notes to financial statements

F-19

NETWORK INSTALLATION CORP. AND SUBSIDIARIES
NOTES TO CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2004

1. DESCRIPTION OF BUSINESS AND SEGMENTS

Network Installation Corp (NIC) was incorporated on July 18, 1997, under the
laws of the State of California. NIC is a full service computer cabling,
networking and telecommunications integrator contractor, providing networks from
stem to stem in house. NIC participates in the worldwide network infrastructure
market to end users, structured cabling market and the telephony services. NIC,
Flexxtech and Del Mar Systems International, Inc. (DMSI) are together referred
to as "the Company".

According to the terms of the share exchange agreement, control of the combined
companies (the "Company") passed to the former shareholders of NIC. Although
from a legal perspective, Flexxtech acquired NIC, the transaction is viewed as a
recapitalization of NIC, accompanied by an issuance of stock by NIC to the
shareholders of Flexxtech. This is because Flexxtech did not have operations
immediately prior to the transaction, and following the transaction, NIC was the
operating company.

On March 1, 2004, NIC acquired 100% of the outstanding shares of Del Mar Systems
International, Inc. (DMSI), a Company operating in the telecommunication
solutions industry. The operations of DMSI have been consolidated with the
operations of the Company, since March 1, 2004.

A Certificate of Amendment was filed on July 10, 2003 to change the parent
company's name from Flexxtech Corporation to Network Installation Corp.

The accompanying unaudited condensed interim financial statements have been
prepared in accordance with the rules and regulations of the Securities and
Exchange Commission for the presentation of interim financial information, but
do not include all the information and footnotes required by generally accepted
accounting principles for complete financial statements. The audited financial
statements for the two years ended December 31, 2003 and 2002 were filed on
April 9, 2004 with the Securities and Exchange Commission and is hereby
referenced. In the opinion of management, all adjustments considered necessary
for a fair presentation have been included. Operating results for the
three-month periods ended March 31, 2004 are not necessarily indicative of the
results that may be expected for the year ended December 31, 2004.

F-20

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation
-----------------------------

The accompanying financial statements include the accounts of Network
Installation Corp., formerly Flexxtech Corporation (legal acquirer, the
"Parent"), and its 100% owned subsidiaries, Network Installation Corporation and
Del Mar Systems International, Inc. All significant inter-company accounts and
transactions have been eliminated in consolidation. The results include the
accounts of NIC and Flexxtech for the three months ended March 31, 2004, and the
results of DMSI from the date of acquisition, March 1, 2004 through March 31,
2004. The historical results for the three months ended March 31, 2003 include
NIC only.

Revenue Recognition
--------------------

F-21

Stock-based Compensation
-------------------------

In October 1995, the FASB issued SFAS No. 123, "Accounting for Stock-Based
Compensation" amended by SFAS No 148, "Accounting for Stock Based Compensation
Transition and Disclosure". SFAS No. 123 prescribes accounting and reporting
standards for all stock-based compensation plans, including employee stock
options, restricted stock, employee stock purchase plans and stock appreciation
rights. SFAS No. 123 requires compensation expense to be recorded (i) using the
new fair value method or (ii) using the existing accounting rules prescribed by
Accounting Principles Board Opinion No. 25, "Accounting for stock issued to
employees" (APB 25) and related interpretations with proforma disclosure of what
net income and earnings per share would have been had the Company adopted the
new fair value method. The Company uses the intrinsic value method prescribed by
APB 25 and has opted for the disclosure provisions of SFAS No.123. No options
were issued during the three months ended March 31, 2004 and 2003.

Basic and Diluted Net Loss Per Share
------------------------------------------

Net loss per share is calculated in accordance with the Statement of financial
accounting standards No. 128 (SFAS No. 128), "Earnings per share". Basic net
loss per share is based upon the weighted average number of common shares
outstanding. Diluted net loss per share is based on the assumption that all
dilutive convertible debentures and warrants were converted or exercised.

Segment Reporting
------------------

Statement of Financial Accounting Standards No. 131 ("SFAS 131"), "Disclosure
About Segments of an Enterprise and Related Information" requires use of the
"management approach" model for segment reporting. The management approach model
is based on the way a company's management organizes segments within the company
for making operating decisions and assessing performance. Reportable segments
are based on products and services, geography, legal structure, management
structure, or any other manner in which management disaggregates a company. SFAS
131 has no effect on the Company's consolidated financial statements for the
period ended March 31, 2004 and 2003, as substantially all of the Company's
operations are conducted in one industry segment.

Risks and Uncertainties
-------------------------

Vulnerability due to supplier concentrations - The Company had two major sources
for the supply of materials in the three-month period ended March 31, 2003,
which accounted for 85% of total purchases of the Company. Total outstanding
balance due this supplier as of March 31, 2003 was $153,307. For the
three-month period ended March 31, 2004, no supplier accounted for more than 10%
of the Company's purchase.

Vulnerability due to customer concentrations - In the period ended March 31,
2003, total sales to three major customers, sales to which exceeded 10% of the
Company's total annual sales, amounted to approximately $335,000. There was
receivable balance of $169,915 from these customers as of March 31, 2003.
For the three-month ended March 31, 2004, there were no customers that accounted
for more than 10% of the Company's total sales.

F-22

3. GOING CONCERN

The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles, which contemplate continuation of the
Company as a going concern. However, the Company has accumulated deficit of
$6,012,962, is generating losses from operations, and has a negative working
capital. The continuing losses have adversely affected the liquidity of the
Company. The Company faces continuing significant business risks, including but,
not limited to, its ability to maintain vendor and supplier relationships by
making timely payments when due.

Management has taken the following steps to revise its operating and financial
requirements, which it believes are sufficient to provide the Company with the
ability to continue as a going concern. Management devoted considerable effort
towards obtaining additional equity financing through various private placements
and evaluation of its distribution and marketing methods.

4 ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses is comprised of the following:

March 31,
2004
----------
Accounts payable. . $ 359,932
Payroll tax payable 155,805
Litigation accrual. 409,459
Accrued expenses. . 266,188
----------

$1,191,384
==========

Payroll tax liabilities amounting to $92,890 pertains to the calendar years from
1999 to 2001. The Company has agreed to pay the payroll tax liability in monthly
installments of $6,500 beginning March 15, 2003 until entire amount is paid in
full. No payment was made during the three months ended March 31, 2004.

5. NOTES PAYABLE

The Company contracted a $500,000 note payable in March 2004 in connection with
the DMSI acquisition. This note bears interest at 5% and is payable in monthly
installment of $42,804, maturing in April 2005. The balance outstanding at March
31, 2004 is $459,280.

F-23

The Company has an unsecured, non-interest bearing note for $25,000 due November
2005. The Company also has a $45,500 loan payable by March 31, 2005.

6. RELATED PARTY TRANSACTIONS

Related Party Notes Payable - Current
------------------------------------------

The Company has an unsecured, non-interest bearing notes for $87,691 due June
15, 2004, due to an officer. An additional $46,489 was contracted during the
three month ended March 31, 2004. This additional advance is non-interest
bearing and due July 30, 2004.

During the three months ended March 31, 2004, the Company repaid a $76,000 due
to the majority shareholder under a factoring agreement.

The Company also issued convertible debentures to the majority shareholder (see
note 10).

The Company earned revenue from an entity related by a common officer and
shareholder, amounting $98,791 during the three month period ended March 31,
2003. The account receivable balance of $66,378 from this entity was written
off as of March 31, 2003. The entire amount of write-off has been recorded as
deemed dividend in the accompanying financial statements.

7. INCOME TAXES

No provision was made for Federal income tax since the Company has significant
net operating loss. Through December 31, 2003, the Company incurred net
operating losses for tax purposes of approximately $3,450,000. The net operating
loss carry forwards may be used to reduce taxable income through the year 2022.
The availability of the Company's net operating loss carryforwards are subject
to limitation if there is a 50% or more positive change in the ownership of the
Company's stock. A valuation allowance for 100% of the deferred taxes asset has
been recorded due to the uncertainty of its realization.

8. COMMITMENTS & CONTINGENCIES

Litigation
----------

F-24

On April 25, 2003 the Superior Court of the State of California, County of
Orange, entered a judgment in the amount of $46,120 against the Company and its
former management in favor of a vendor of the Company's former subsidiary, North
Texas Circuit Board, or NTCB. On August 20, 2002 the Company sold NTCB to BC
Electronics Inc. Pursuant to terms of the share purchase agreement, BC
Electronics assumed all liabilities of NTCB. In December 2003 the Company filed
a motion to vacate the judgment for lack of personal service. In February 2004,
the Court ruled in favor of the Company and the judgment was vacated. Although
the Company was the guarantor on the loan, NTCB is the principal debtor and (i)
the Company will bring action against NTCB to seek relief or (ii) because
partial payment was made by NTCB, it could affect the legal status of the
guarantee, which the Company believes may absolve it of liability. In February
2004, the plaintiff refiled the complaint. Although the Company will continue to
oppose the action the Company and its current management have begun settlement
discussions with the plaintiff.

The Company may be involved in litigation, negotiation and settlement matters
that may occur in the day-to-day operations of the Company and its subsidiary.
Management does not believe implication of these litigations will, including
those discussed above, have any other material impact on the Company's financial
statements.

9. DUE TO FACTOR

On February 27, 2003, NIC entered into a factoring and security agreement to
sell, transfer and assign certain accounts receivable to Orange Commercial
Credit (OCC). OCC may on its sole discretion purchase any specific account. All
accounts sold are with recourse on seller. All of the Company's property of NIC
including accounts receivable, inventories, equipment and promissory notes are
collateral under this agreement. OCC will advance 80% of the face amount of each
account. The difference between the face amount of each purchased account and
advance on the purchased account shall be reserve and will be released after
deductions of discount and charge backs on the 15th and the last day of each
month. OCC charges 1% of gross face value of purchased receivable for finance
charge and 1% for administrative fees with minimum charge of $750 on each
settlement date. Due to factor amounted to $10,759 as of March 31, 2004,
respectively.

The balance of factored accounts receivable amounted to $0 as of March 31, 2004

10. STOCKHOLDERS' EQUITY

Stock Split
------------

F-25

Equity
------

During the three months ended March 31, 2004, the Company issued common stock as
follows:

130,549 shares of common stock valued at $500,000 were issued for the
acquisition of its subsidiary, Del Mar Systems International, Inc.

The Company issued 8,000 shares of common stock to a shareholder for conversion
of a Promissory Note amounting to $40,000.

The Company issued 138,106 shares of common stock for conversion of debentures
and related accrued interest in the amount of to $529,822. The Company issued
11,462 share of common stock for assumption of liabilities in the amount of
$32,552 by a related party, a major shareholder of the Company.

The Company issued 50,000 shares of common stock to a consultant for service
rendered valued at $195,000.

The Company issued 6,410 shares of common stock for a consideration of $24,358.

Convertible Debentures - Related Parties
--------------------------------------------

During the period ended March 31, 2004, the Company issued $415,500 debentures
to a major shareholder of the Company. These debentures carry an interest rate
of 6% per annum, due in December 2008 and February and March of 2009. Holder is
entitled to convert the face amount of this Debenture, plus accrued interest,
anytime following the Closing Date, at the lesser of (i) 75% of the lowest
closing bid price during the fifteen (15) trading days prior to the Conversion
Date or (ii) 100% of the closing bid prices for the twenty (20) trading days
immediately preceding the Closing Date ("Fixed Conversion Price"), each being
referred to as the "Conversion Price". No fractional shares or scrip
representing fractions of shares will be issued on conversion, but the number of
shares issuable shall be rounded up or down, as the case may be, to the nearest
whole share. In accordance with EITF 00-27 98-5, the beneficial conversion
feature on the issuance of the convertible debenture for the quarter ended March
31, 2004 has been recorded in the amount of $96,375. On March 31, 2004, the
Company contracted an additional $155,000 convertible debentures with a major
shareholder of the Company, which debentures were not funded until April 1,
2004. The beneficial conversation feature has been recorded in the amount of
$38,750 during the three months ended March 31, 2004.

11. BASIC AND DILUTED NET LOSS PER SHARE

Basic and diluted net loss per share for the three-month period ended March 31,
2004 were determined by dividing net loss for the periods by the weighted
average number of basic and diluted shares of common stock outstanding. Weighted
average number of shares used to compute basic and diluted loss per share is the
same since the effect of dilutive securities is anti-dilutive.

12. SUPPLEMENTAL DISCLOSURES OF CASH FLOWS

The Company paid interest of $2,084 and $0 during the three months ended March
31, 2004 and 2003, respectively. The Company paid income taxes of $0 during the
three months ended March 31, 2004 and 2003, respectively.

F-26

13. ACQUISITION OF DEL MAR SYSTEMS INTERNATIONAL, INC.

Pursuant to an acquisition agreement, the Company acquired 100% of the
outstanding shares of San Diego area-based telecommunication solutions firm Del
Mar Systems International, Inc. on March 1, 2004 for $1 million structured as a
(i) $500,000 12 month 5% Note consisting of 12 equal monthly installments of
$42,804 and (ii) $500,000 in 130,549 shares of the Company's restricted common
stock. The pro forma information including the operations of DMSI is not
available for the three months ended March 31, 2004, and for the year ended
December 31, 2003, as they are in the process of being compiled.

INDEMNIFICATION OF DIRECTORS AND OFFICERS

Under of our Certificate of Incorporation and By-Laws, each person who is or was
a director or officer of Registrant shall be indemnified by the Registrant as of
right to the full extent permitted or authorized by the General Corporation Law
of Nevada. Under such law, to the extent that such person is successful on the
merits of defense of a suit or proceeding brought against such person by reason
of the fact that such person is a director or officer of the Registrant, such
person shall be indemnified against expenses, including attorneys' fees,
reasonably incurred in connection with such action. If unsuccessful in defense
of a third-party civil suit or a criminal suit or if such a suit is settled,
such a person shall be indemnified under such law against both (1) expenses
(including attorneys' fees) and (2) judgments, fines and amounts paid in
settlement if such person acted in good faith and in a manner such person
reasonably believed to be in, or not opposed to, the best interests of the
Registrant, and with respect to any criminal action, had no reasonable cause to
believe such person's conduct was unlawful. If unsuccessful in defense of a suit
brought by or under the right of the Registrant, or if such suit is settled,
such a person shall be indemnified under such law only against expenses
(including attorneys' fees) incurred in the defense or settlement of such suit
if such person acted in good faith and in a manner such person reasonably
believed to be in, or not opposed to, the best interests of the Registrant,
except that if such a person is adjudicated to be liable in such suit for
negligence or misconduct in the performance of such person's duty to the
Registrant, such person cannot be made whole even for expenses unless the court
determines that such person is fairly and reasonably entitled to be indemnified
for such expenses.

F-27

EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth our expenses in connection with this registration
statement. All of these expenses are estimates, other than the fees and expenses
of legal counsel and filing fees payable to the Securities and Exchange
Commission.

Filing Fee--Securities and Exchange Commission $400
Legal Expenses $6,000
Accounting Expenses $7,500
Blue Sky Fees and Expenses $1,000
Printing Expenses $3,000
Miscellaneous expenses $2,100
---------
Total: $20,000

RECENT SALES OF UNREGISTERED SECURITIES

On August 1, 2001, we issued $220,000 of debentures. On October 1, 2001, we
issued $330,000 of debentures. On December 1, 2002, we issued $170,000 of
debentures. The debentures carry an interest rate of 6% per annum and were
originally due in August 2003 however the term was extended until August
2008.

The sales of the debentures described in the immediately preceding
paragraph were undertaken under Rule 506 of Regulation D under the Securities
Act of 1933, as amended, by the fact that:

- the sales were made to a sophisticated or accredited investors, as defined
in Rule 502;

- we gave each purchaser the opportunity to ask questions and receive answers
concerning the terms and conditions of the offering and to obtain any
additional information which we possessed or could acquire without
unreasonable effort or expense that is necessary to verify the accuracy of
information furnished;

- at a reasonable time prior to the sale of securities, we advised each
purchaser of the limitations on resale in the manner contained in Rule
502(d)2;

- neither we nor any person acting on our behalf sold the securities by any
form of general solicitation or general advertising; and

- we exercised reasonable care to assure that each purchaser of the
securities is not an underwriter within the meaning of Section 2(11) of the
Securities Act of 1933 in compliance with Rule 502(d).

In the three months ended September 30, 2001, we sold a total of 31,996 shares
of common stock without registration pursuant to the exemptions afforded by
Regulation D resulting in gross proceeds of $30,320. These sales were undertaken
under Rule 506 of Regulation D under the Securities Act of 1933, as amended, by
the fact that:

- the sales were made to a sophisticated or accredited investors, as defined
in Rule 502;

- at a reasonable time prior to the sale of securities, we advised each
purchaser of the limitations on resale in the manner contained in Rule
502(d)2;

- neither we nor any person acting on our behalf sold the securities by any
form of general solicitation or general advertising; and

- we exercised reasonable care to assure that each purchaser of the
securities is not an underwriter within the meaning of Section 2(11) of the
Securities Act of 1933 in compliance with Rule 502(d).

We utilized the services of finders in placing the 31,996 shares of common
stock. We did not utilize the services of brokers or underwriters. The Offering
was self-underwritten. The Offering expenses were approximately 15% of the gross
Offering proceeds. The balance of the Offering expenses were related to general
sales expenses, including, but not limited to, due diligence, accounting and
legal expenses.

In the three months ended September 30, 2001, we sold 6,676 shares of common
stock pursuant to the provisions of Regulation S resulting in gross proceeds of
$5,600. We relied on the following facts:

- The offer was made in an offshore transaction because, at the time the buy
order was originated, we reasonably believed the buyer was outside the
United States. We believed the buyer was outside the United States because
the buyer was physically located outside of the United States and presented
an address that was also located outside of the United States.

- No directed selling efforts were made in the United States in connection
with the offer.

- the buyer certified that it is either a non-United States person and is not
acquiring the securities for the account or benefit of any United States
person;

- the buyer agreed (a) that any resale will either be in accordance with
Regulation S, after registration, or under a registration exemption; and
(b) not to engage in hedging transactions for those securities, except in
compliance with the Securities Act;

- the securities contained a legend stating (a) that the transfer of the
security is prohibited, unless the transaction (1) complies with Regulation
S, (2) is after registration, or (3) is under a registration exemption; and
(b) that hedging those securities is prohibited, unless done in compliance
with the Securities Act; and

- we are required to refuse to register any transfer of the securities that
is not made either in accordance with Regulation S, after registration, or
under a registration exemption.

We utilized the services of finders in placing the 6,676 shares of common stock.
We did not utilize the services of brokers or underwriters. The Offering was
self-underwritten. The Offering expenses were approximately 15% of the gross
Offering proceeds. The balance of the Offering expenses were related to general
sales expenses, including, but not limited to, due diligence, accounting and
legal expenses.

In August, 2001 we commenced a convertible debenture offering. The placement
agent was May Group, Inc. May Davis received 200,000 shares of common stock
pursuant to Regulation D and cash consideration as a fee. These sales were
undertaken under Rule 506 of Regulation D under the Securities Act of 1933, as
amended, by the fact that:

- the sales were made to a sophisticated or accredited investors, as defined
in Rule 502;

- at a reasonable time prior to the sale of securities, we advised each
purchaser of the limitations on resale in the manner contained in Rule
502(d)2;

- neither we nor any person acting on our behalf sold the securities by any
form of general solicitation or general advertising; and

- we exercised reasonable care to assure that each purchaser of the
securities is not an underwriter within the meaning of Section 2(11) of the
Securities Act of 1933 in compliance with Rule 502(d).

During the period between June 2001 and December 2001, we sold Convertible
Debentures to the following persons in the amounts indicated below.

Number Amount Name of Bondholder
- ------ ------ ------------------
001 $10,000 Bonnie Goldstein
002 $10,000 Neil Jones
003 $20,000 Terry and Carol Conner
004 $10,000 Robert Dutch
005 $20,000 Howard and Elaine Bull
006 $50,000 Daniel Grillo
007 $10,000 Jon Cummings
008 $10,000 Richard Dredge
009 $10,000 Seymour Niesen
010 $10,000 John Williams
011 $10,000 Koenraad Blot
012 $10,000 Steven and Mary LeMott
013 $10,000 Andrew Geiss
014 $10,000 John and Dianna McNeish
015 $10,000 Carl Ziegler
016 $10,000 Michael Beecher
017 $10,000 Michael Dahlquist
018 $10,000 Carl Hoehner
019 $20,000 Vernon Koto
020 $20,000 Kenneth E. Rogers
021 $10,000 John Bollinger
022 $10,000 Richard Blue
023 $10,000 Frank Damato
----------
$310,000

Second Tranche

20,000 Craig Wexler
30,000 Lawrence Wexler
12,500 Andrew Smith
12,500 Global Coast Insurance
95,000 Charles Mangione
----------
$170,000

We have also sold debentures to the following investors in the following
amounts.

180,000 David Wykoff
60,000 Dutchess Private Equities Fund, L.P.
---------
$240,000

These sales were undertaken under Rule 506 of Regulation D under the Securities
Act of 1933, as amended, by the fact that:

- the sales were made to a sophisticated or accredited investors, as defined
in Rule 502;

- at a reasonable time prior to the sale of securities, we advised each
purchaser of the limitations on resale in the manner contained in Rule
502(d)2;

- neither we nor any person acting on our behalf sold the securities by any
form of general solicitation or general advertising; and

- we exercised reasonable care to assure that each purchaser of the
securities is not an underwriter within the meaning of Section 2(11) of the
Securities Act of 1933 in compliance with Rule 502(d).

On August 15, 2001, we issued 2,000,000 shares of our common stock and on
September 20, 2001 we issud 3,929,333 shares of our common stock to VLK Capital
Corp. The shares were issued for managerial services valued at $.902 per share,
as amended. These sales were undertaken under Rule 506 of Regulation D under the
Securities Act of 1933, as amended, by the fact that:

- the sales were made to a sophisticated or accredited investors, as defined
in Rule 502;

- at a reasonable time prior to the sale of securities, we advised each
purchaser of the limitations on resale in the manner contained in Rule
502(d)2;

- neither we nor any person acting on our behalf sold the securities by any
form of general solicitation or general advertising; and

- we exercised reasonable care to assure that each purchaser of the
securities is not an underwriter within the meaning of Section 2(11) of the
Securities Act of 1933 in compliance with Rule 502(d).

During the fourth quarter of 2001 we issued additional shares of Network
Installation common stock to:

- Ten shareholders purchased shares 44,344 at $0.65 per share - Three
shareholders purchased 12,337 shares at $0.75 per share - One shareholder
purchased 4,000 shares at $0.55 per share

Additionally, we issued seven shareholders 100,028 shares for services and one
additional shareholder 600,000 shares collected against a loan.

These sales during the forth quarter of 2001 described in the immediately
preceding paragraphs were undertaken under Rule 506 of Regulation D under the
Securities Act of 1933, as amended, by the fact that:

- the sales were made to a sophisticated or accredited investors, as defined
in Rule 502;

- at a reasonable time prior to the sale of securities, we advised each
purchaser of the limitations on resale in the manner contained in Rule
502(d)2;

- neither we nor any person acting on our behalf sold the securities by any
form of general solicitation or general advertising; and

- we exercised reasonable care to assure that each purchaser of the
securities is not an underwriter within the meaning of Section 2(11) of the
Securities Act of 1933 in compliance with Rule 502(d).

During the forth quarter of 2001 we issued additional shares without
registration under the Act in reliance on the exemption from registration
provided by Regulation S under the Act, as follows:

- One shareholder purchased 249,920 shares at $.202 per share - One
shareholder purchased 69,709 shares at $0.21 per share - One shareholder
purchased 130,000 shares at $0.35 per share

These sales constitute a total of 442,629 shares issued in reliance on
Regulation S. We relied on the following facts:

- No directed selling efforts were made in the United States in connection
with the offer.

- the buyer certified that it is either a non-United States person and is not
acquiring the securities for the account or benefit of any United States
person;

- we are required to refuse to register any transfer of the securities that
is not made either in accordance with Regulation S, after registration, or
under a registration exemption.

In the 12 months ended December 31, 2002 and pursuant to Regulation D or
Regulation S we issued a total of 67,725,390 shares of which 11,317,851 shares
were sold for cash. The breakdown of shares sold for cash for the 12 Months
ended December 31, 2002 are as follows:

Quarter Amount of Securities Regulation Gross Proceeds

1st 1,900,634 S $284,378.12
1st 232,000 D $ 58,000.00
2nd 3,482,396 S $462,813.61
2nd 59,452 D $ 19,060.00
3rd 194,120 S $ 13,879.24
3rd 150,000 D $ 3,500.00
4th 5,299,249 S $ 23,591.57
---------- -----------
Total 11,317,851 $865,222.54
========== ===========

The sales described in the immediately preceding chart as being sold pursuant to
Regulation D were undertaken under Rule 506 of Regulation D under the Securities
Act of 1933, as amended, by the fact that:

- the sales were made to a sophisticated or accredited investors, as defined
in Rule 502;

- at a reasonable time prior to the sale of securities, we advised each
purchaser of the limitations on resale in the manner contained in Rule
502(d)2;

- neither we nor any person acting on our behalf sold the securities by any
form of general solicitation or general advertising; and

- we exercised reasonable care to assure that each purchaser of the
securities is not an underwriter within the meaning of Section 2(11) of the
Securities Act of 1933 in compliance with Rule 502(d).

For the sales described in the preceding chart as being sold pursuant to
Regulation S, we relied on the following facts:

- No directed selling efforts were made in the United States in connection
with the offer;

- the buyer certified that it is either a non-United States person and is not
acquiring the securities for the account or benefit of any United States
person;

- we are required to refuse to register any transfer of the securities that
is not made either in accordance with Regulation S, after registration, or
under a registration exemption.

During the first quarter ended March 31, 2002, we sold 10,679 shares for cash in
the amount of $343,358. We issued 1,133 shares of common stock for consulting
services amounting $113,000 to Atlantis Partners. We issued 1,050 shares of
common stock for compensation amounting $92,400. We issued 4,250 shares of
common stock to Western Cottonwood Corporation as collateral against a debt of
$283,700.

The sales described in the immediately preceding paragraph were undertaken under
Rule 506 of Regulation D under the Securities Act of 1933, as amended, by the
fact that:

- the sales were made to a sophisticated or accredited investors, as defined
in Rule 502;

- at a reasonable time prior to the sale of securities, we advised each
purchaser of the limitations on resale in the manner contained in Rule
502(d)2;

- neither we nor any person acting on our behalf sold the securities by any
form of general solicitation or general advertising; and

- we exercised reasonable care to assure that each purchaser of the
securities is not an underwriter within the meaning of Section 2(11) of the
Securities Act of 1933 in compliance with Rule 502(d).

During the second quarter ended June 30, 2002, we sold 18,376 shares for cash in
the amount of $480,833. We issued 10,413 shares of common stock for consulting
services valued at $479,644. We also settled debts amounting to $259,200 by
issuing 6,081 shares of common stock valued at $431,644.

The sales described in the immediately preceding paragraph were undertaken under
Rule 506 of Regulation D under the Securities Act of 1933, as amended, by the
fact that:

- the sales were made to a sophisticated or accredited investors, as defined
in Rule 502;

- at a reasonable time prior to the sale of securities, we advised each
purchaser of the limitations on resale in the manner contained in Rule
502(d)2;

- neither we nor any person acting on our behalf sold the securities by any
form of general solicitation or general advertising; and

- we exercised reasonable care to assure that each purchaser of the
securities is not an underwriter within the meaning of Section 2(11) of the
Securities Act of 1933 in compliance with Rule 502(d).

During the third quarter ended September 30, 2002, we issued 9,375 shares for
finder's fee related to sale of common stock. The shares issued for finders'
fees were valued at $93,750. We issued 10,000 shares issued at $100,000 to an
investor for a price difference adjustment. The price difference adjustment is
the excess amount received from an investor on the sale of common stock over the
market price. We issued 175 shares for consulting services valued at $3,233. We
issued 7,500 shares to Greg Mardock, our President at that time, as
compensation, and valued at $138,596. We issued 10,076 shares of common stock
valued on conversion of debentures at $140,527. We also settled a debt of
$100,000 payable to Western Cottonwood Corporation, by issuing 25000 shares
valued at $250,000 resulting in a loss of $150,000 on settlement of the debt.
During the three month period ended September 30, 2002, we sold 1,721 shares of
common stock for cash in the amount of $17,088.

The sales described in the immediately preceding paragraph were undertaken under
Rule 506 of Regulation D under the Securities Act of 1933, as amended, by the
fact that:

- the sales were made to a sophisticated or accredited investors, as defined
in Rule 502;

- at a reasonable time prior to the sale of securities, we advised each
purchaser of the limitations on resale in the manner contained in Rule
502(d)2;

- neither we nor any person acting on our behalf sold the securities by any
form of general solicitation or general advertising; and

- we exercised reasonable care to assure that each purchaser of the
securities is not an underwriter within the meaning of Section 2(11) of the
Securities Act of 1933 in compliance with Rule 502(d).

During the fourth quarter ended December 31, 2002, we issued common stock to
various parties as per follows:

a) On October 7, 2002, 51,361 shares of common stock valued at $70,449 were
issued in the name of Delaware Charter Guarantee and Trust, FBO Greg Mardock,
our President at that time, in exchange for Promissory Notes of $64,588
principal amount and interest of $5,861.

b) On October 8, 2002, Edward R. Fearon, the former President of Primavera and
Escamilla Capital Corporation received 6,250 and 8,750 shares respectively,
valued at a total of $60,000.

c) On October 8, 2002, Edward R. Fearon, the former President of Primavera was
issued 15,000 shares of common stock valued at $60,000 for consulting services
performed during the year ended December 31, 2002.

d) On November 5, 2002 Western Cottonwood Corp was issued 75,000 shares of
common stock valued at $300,000 in exchange for a debt of $300,000.

e) During the three month ended December 31, 2002, we settled debentures
amounting $50,800 by issuing 34,940 shares of common stock valued at $50,800.

f) We issued 5,000 shares to a consultant valued at $20,000 for same amount of
services performed during the year ended December 31, 2002.

g) During the three months ended December 31, 2002, we issued 26,496 shares of
common stock for cash amounting $23,882.

The sales during the fourth quarter ended December 31, 2002 were undertaken
under Rule 506 of Regulation D under the Securities Act of 1933, as amended, by
the fact that:

- the sales were made to a sophisticated or accredited investors, as defined
in Rule 502;

- at a reasonable time prior to the sale of securities, we advised each
purchaser of the limitations on resale in the manner contained in Rule
502(d)2;

- neither we nor any person acting on our behalf sold the securities by any
form of general solicitation or general advertising; and

- we exercised reasonable care to assure that each purchaser of the
securities is not an underwriter within the meaning of Section 2(11) of the
Securities Act of 1933 in compliance with Rule 502(d).

During the year ended December 31, 2002, we issued 45,016 shares of common stock
in conversion of debentures amounting to $191,327.

The sales of the shares of common stock described in the immediately preceding
paragraph were undertaken under Rule 506 of Regulation D under the Securities
Act of 1933, as amended, by the fact that:

- the sales were made to a sophisticated or accredited investors, as defined
in Rule 502;

- at a reasonable time prior to the sale of securities, we advised each
purchaser of the limitations on resale in the manner contained in Rule
502(d)2;

- neither we nor any person acting on our behalf sold the securities by any
form of general solicitation or general advertising; and

- we exercised reasonable care to assure that each purchaser of the
securities is not an underwriter within the meaning of Section 2(11) of the
Securities Act of 1933 in compliance with Rule 502(d).

In April 2003, in connection with the rescission agreement, we issued
convertible debentures of $140,000 to various investors.

The sales of the convertible debentures described in the immediately preceding
paragraph were undertaken under Rule 506 of Regulation D under the Securities
Act of 1933, as amended, by the fact that:

- the sales were made to a sophisticated or accredited investors, as defined
in Rule 502;

- at a reasonable time prior to the sale of securities, we advised each
purchaser of the limitations on resale in the manner contained in Rule
502(d)2;

- neither we nor any person acting on our behalf sold the securities by any
form of general solicitation or general advertising; and

- we exercised reasonable care to assure that each purchaser of the
securities is not an underwriter within the meaning of Section 2(11) of the
Securities Act of 1933 in compliance with Rule 502(d).

In 2002, we issued convertible promissory notes of $59,200 due on March 1, 2004
and $100,000 due on April 1, 2004, carrying an interest rate of 10% per annum.

The sales of the convertible promissory notes described in the immediately
preceding paragraph were undertaken under Rule 506 of Regulation D under the
Securities Act of 1933, as amended, by the fact that:

- the sales were made to a sophisticated or accredited investors, as defined
in Rule 502;

- at a reasonable time prior to the sale of securities, we advised each
purchaser of the limitations on resale in the manner contained in Rule
502(d)2;

- neither we nor any person acting on our behalf sold the securities by any
form of general solicitation or general advertising; and

- we exercised reasonable care to assure that each purchaser of the
securities is not an underwriter within the meaning of Section 2(11) of the
Securities Act of 1933 in compliance with Rule 502(d).

During the six month period ended June 30, 2003, we issued common stock as
follows:

- 75,000 shares of common stock were issued to an entity related through
common officer at that time, for consulting fees, amounting to $3,750; and

7,382,000 shares of common stock valued at $1,107,300 were issued for
acquisition of its subsidiary, Network Installation Corporation.

The sales of the common stock during the six month period ended June 30, 2003,
described in the immediately preceding paragraph, were undertaken under Rule 506
of Regulation D under the Securities Act of 1933, as amended, by the fact that:

- the sales were made to a sophisticated or accredited investors, as defined
in Rule 502;

- at a reasonable time prior to the sale of securities, we advised each
purchaser of the limitations on resale in the manner contained in Rule
502(d)2;

- neither we nor any person acting on our behalf sold the securities by any
form of general solicitation or general advertising; and

- we exercised reasonable care to assure that each purchaser of the
securities is not an underwriter within the meaning of Section 2(11) of the
Securities Act of 1933 in compliance with Rule 502(d).

On April 7, 2003, we issued 800,000 shares of common stock to a major
shareholder as inducement for debenture amounting $80,000.

The issuance of the common stock described in the immediately preceding
paragraph was undertaken under Rule 506 of Regulation D under the Securities
Act of 1933, as amended, by the fact that:

- the sales were made to a sophisticated or accredited investors, as defined
in Rule 502;

- at a reasonable time prior to the sale of securities, we advised each
purchaser of the limitations on resale in the manner contained in Rule
502(d)2;

- neither we nor any person acting on our behalf sold the securities by any
form of general solicitation or general advertising; and

- we exercised reasonable care to assure that each purchaser of the
securities is not an underwriter within the meaning of Section 2(11) of the
Securities Act of 1933 in compliance with Rule 502(d).

On April 7, 2003, we issued 250,000 shares of common stock to an unrelated party
as inducement for debenture amounting $25,000.

The issuance of the common stock described in the immediately preceding
paragraph was undertaken under Rule 506 of Regulation D under the Securities
Act of 1933, as amended, by the fact that:

- the sales were made to a sophisticated or accredited investors, as defined
in Rule 502;

- at a reasonable time prior to the sale of securities, we advised each
purchaser of the limitations on resale in the manner contained in Rule
502(d)2;

- neither we nor any person acting on our behalf sold the securities by any
form of general solicitation or general advertising; and

- we exercised reasonable care to assure that each purchaser of the
securities is not an underwriter within the meaning of Section 2(11) of the
Securities Act of 1933 in compliance with Rule 502(d).

In April 2003, we issued 700,000 shares of common stock to the Dutchess
Advisors, LLC
for consulting services amounting $105,000.

The issuance of the common stock described in the immediately preceding
paragraph was undertaken under Rule 506 of Regulation D under the Securities
Act of 1933, as amended, by the fact that:

- the sales were made to a sophisticated or accredited investors, as defined
in Rule 502;

- at a reasonable time prior to the sale of securities, we advised each
purchaser of the limitations on resale in the manner contained in Rule
502(d)2;

- neither we nor any person acting on our behalf sold the securities by any
form of general solicitation or general advertising; and

- we exercised reasonable care to assure that each purchaser of the
securities is not an underwriter within the meaning of Section 2(11) of the
Securities Act of 1933 in compliance with Rule 502(d).

We issued 490,000 shares of common stock Western Cottonwood and 200,000 shares
to Greg Mardock as a part of restructuring on April 9, 2003 at a value of
$1,727,908.

The issuance of the common stock described in the immediately preceding
paragraph was undertaken under Rule 506 of Regulation D under the Securities
Act of 1933, as amended, by the fact that:

- the sales were made to a sophisticated or accredited investors, as defined
in Rule 502;

- at a reasonable time prior to the sale of securities, we advised each
purchaser of the limitations on resale in the manner contained in Rule
502(d)2;

- neither we nor any person acting on our behalf sold the securities by any
form of general solicitation or general advertising; and

- we exercised reasonable care to assure that each purchaser of the
securities is not an underwriter within the meaning of Section 2(11) of the
Securities Act of 1933 in compliance with Rule 502(d).

On April 10, 2003, we issued a convertible debenture of $40,000 to Dutchess
Private Equities Fund. The debenture converts into common stock at the lesser of
(i) 75% of the lowest closing bid price during the fifteen trading days prior to
the Conversion Date or (ii) 100% of the average of the closing bid prices for
the twenty trading days immediately preceding the Closing Date of the
Transaction.

The issuance of the convertible debenture described in the immediately preceding
paragraph was undertaken under Rule 506 of Regulation D under the Securities Act
of 1933, as amended, by the fact that:

- the sales were made to a sophisticated or accredited investors, as defined
in Rule 502;

- at a reasonable time prior to the sale of securities, we advised each
purchaser of the limitations on resale in the manner contained in Rule
502(d)2;

- neither we nor any person acting on our behalf sold the securities by any
form of general solicitation or general advertising; and

- we exercised reasonable care to assure that each purchaser of the
securities is not an underwriter within the meaning of Section 2(11) of the
Securities Act of 1933 in compliance with Rule 502(d).

On May 5, 2003, we issued convertible debentures of $15,000 to Dutchess Private
Equities Fund. The debentures convert into common stock at the lesser of (i) 75%
of the lowest closing bid price during the fifteen trading days prior to the
Conversion Date or (ii) 100% of the average of the closing bid prices for the
twenty trading days immediately preceding the closing date of the transaction.

The issuance of the convertible debentures described in the immediately
preceding paragraph was undertaken under Rule 506 of Regulation D under the
Securities Act of 1933, as amended, by the fact that:

- the sales were made to a sophisticated or accredited investors, as defined
in Rule 502;

- at a reasonable time prior to the sale of securities, we advised each
purchaser of the limitations on resale in the manner contained in Rule
502(d)2;

- neither we nor any person acting on our behalf sold the securities by any
form of general solicitation or general advertising; and

- we exercised reasonable care to assure that each purchaser of the
securities is not an underwriter within the meaning of Section 2(11) of the
Securities Act of 1933 in compliance with Rule 502(d).

Directors.

The issuance of the common stock described in the immediately preceding
paragraph was undertaken under Rule 506 of Regulation D under the Securities
Act of 1933, as amended, by the fact that:

- the sales were made to a sophisticated or accredited investors, as defined
in Rule 502;

- at a reasonable time prior to the sale of securities, we advised each
purchaser of the limitations on resale in the manner contained in Rule
502(d)2;

- neither we nor any person acting on our behalf sold the securities by any
form of general solicitation or general advertising; and

- we exercised reasonable care to assure that each purchaser of the
securities is not an underwriter within the meaning of Section 2(11) of the
Securities Act of 1933 in compliance with Rule 502(d).

On May 26, 2003, we issued convertible debentures of $25,000 to Dutchess Private
Equities Fund. The debentures convert into common stock at the lesser of (i)
75% of the lowest closing bid price during the fifteen trading days prior to the
Conversion Date or (ii) 100% of the average of the closing bid prices for the
twenty trading days immediately preceding the closing date of the transaction.

- the sales were made to a sophisticated or accredited investors, as defined
in Rule 502;

- at a reasonable time prior to the sale of securities, we advised each
purchaser of the limitations on resale in the manner contained in Rule
502(d)2;

- neither we nor any person acting on our behalf sold the securities by any
form of general solicitation or general advertising; and

- we exercised reasonable care to assure that each purchaser of the
securities is not an underwriter within the meaning of Section 2(11) of the
Securities Act of 1933 in compliance with Rule 502(d).

On June 16, 2003, we issued convertible debentures of $25,000 to Dutchess
Private Equities Fund. The debentures convert into common stock at the
lesser of (i) 75% of the lowest closing bid price during the fifteen trading
days prior to the Conversion Date or (ii) 100% of the average of the closing bid
prices for the twenty trading days immediately preceding the Closing Date of the
Transaction.