AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 31, 2005.
                          REGISTRATION NO. 333-_______

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

                                    FORM S-1
             REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

                             ACCUPOLL HOLDING CORP.
             (Exact name of registrant as specified in its charter)

                                     NEVADA
                                     ------
         (State or other jurisdiction of incorporation or organization)

                                      6770
                                      ----
            (Primary Standard Industrial Classification Code Number)

                                   11-2751630
                                   ----------
                     (I.R.S. Employer Identification Number)

                         15101 Red Hill Ave., Suite 220
                                Tustin, CA 92780
                                 (949) 200-4000
               (Address, including zip code, and telephone number,
        including area code, of registrant's principal executive offices)

                                  Dennis Vadura
                         15101 Red Hill Ave., Suite 220
                                Tustin, CA 92780
                                 (949) 200-4000
                                 --------------
            (Name, address, including zip code, and telephone number,
                   including area code, of agent for service)

                                 WITH COPIES TO:

                             Gregory Sichenzia, Esq.
                              David Schubauer, Esq.
                       Sichenzia Ross Friedman Ference LLP
                           1065 Avenue of the Americas
                            New York, New York 10018
                                 (212) 930-9700

 AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT
 ------------------------------------------------------------------------------
       (Approximate date of commencement of proposed sale to the public)

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|

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. |_|

                       (COVER CONTINUES ON FOLLOWING PAGE)

<PAGE>

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,
please check the following box. |_|

<TABLE>
<CAPTION>
                         CALCULATION OF REGISTRATION FEE
============================================    =================    ====================    =====================    ==============
                                                                       PROPOSED MAXIMUM         PROPOSED MAXIMUM         AMOUNT OF
     TITLE OF EACH CLASS OF SECURITIES            AMOUNT TO BE        OFFERING PRICE PER       AGGREGATE OFFERING      REGISTRATION
              TO BE REGISTERED                     REGISTERED             SECURITY(1)                PRICE                  FEE
--------------------------------------------    -----------------    --------------------    ---------------------    --------------
<S>                                             <C>                  <C>                     <C>                      <C>
Common Stock, $.001 par value (2)                  79,832,045                $0.094              $7,504,212.23            $883.25
Common Stock, $.001 par value                      25,986,499                $0.094              $2,442,730.91            $287.51
--------------------------------------------    -----------------    --------------------    ---------------------    --------------
Total                                             105,818,544                $0.094              $9,946,943.14          $1,170.76
============================================    =================    ====================    =====================    ==============
</TABLE>

(1)  Estimated  solely for  purposes  of  calculating  the  registration  fee in
     accordance  with Rule 457(c) and Rule 457(g)  under the  Securities  Act of
     1933,  using  the  average  of the high and low  price as  reported  on the
     Over-The-Counter  Bulletin Board on January 25, 2005,  which was $0.094 per
     share.

(2)  Includes a good faith  estimate of shares of common stock issuable upon the
     exercise of common stock purchase  warrants to account for antidilution and
     price protection adjustments,  as contemplated by certain provisions of the
     Subscription Agreements.

     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 THIS  REGISTRATION  STATEMENT  SHALL BECOME
EFFECTIVE  ON SUCH  DATE  AS THE  SECURITIES  AND  EXCHANGE  COMMISSION,  ACTING
PURSUANT TO SAID SECTION 8(A) MAY DETERMINE.

================================================================================

<PAGE>

THE  INFORMATION  IN THIS  PROSPECTUS  IS NOT COMPLETE  AND MAY BE CHANGED.  THE
SELLING  STOCKHOLDERS  MAY NOT SELL  THESE  SECURITIES  UNTIL  THE  REGISTRATION
STATEMENT FILED WITH THE SECURITIES AND EXCHANGE  COMMISSION IS EFFECTIVE.  THIS
PROSPECTUS  IS NOT AN OFFER TO SELL THESE  SECURITIES  AND IS NOT  SOLICITING AN
OFFER TO BUY  THESE  SECURITIES  IN ANY  STATE  WHERE  THE  OFFER OR SALE IS NOT
PERMITTED.

      PRELIMINARY PROSPECTUS SUBJECT TO COMPLETION, DATED JANUARY 31, 2005

                             ACCUPOLL HOLDING CORP.
                           UP TO 105,818,544 SHARES OF
                                  COMMON STOCK

         This prospectus relates to the resale by the selling stockholders of up
to 105,818,544  shares of our common stock.  The selling  stockholders  may sell
common  stock  from time to time in the  principal  market on which the stock is
quoted at the prevailing market price or in negotiated transactions. The selling
stockholders  may be deemed  underwriters  of the shares of common stock,  which
they are offering.

         We are not  selling  any shares of common  stock in this  offering  and
therefore  will not receive any proceeds from this offering.  We will,  however,
receive  the sale  price  of any  common  stock we sell for cash to the  selling
stockholders  upon  exercise  of  warrants.   All  costs  associated  with  this
registration will be borne by us.

         Our common stock is currently quoted on the  Over-The-Counter  Bulletin
Board under the symbol ACUP.  As of January 19, 2005,  the closing  price of our
common stock was $0.093.

            INVESTING IN OUR COMMON STOCK INVOLVES SUBSTANTIAL RISKS.
                    SEE "RISK FACTORS," BEGINNING ON PAGE 2.

         NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS  IS TRUTHFUL OR  COMPLETE.  ANY  REPRESENTATION  TO THE CONTRARY IS A
CRIMINAL OFFENSE.

         The  information in this Prospectus is not complete and may be changed.
This  Prospectus  is included in the  Registration  Statement  that was filed by
AccuPoll Holding Corp. with the Securities and Exchange Commission.  The selling
stockholders  may not sell these  securities  until the  registration  statement
becomes effective.  This Prospectus is not an offer to sell these securities and
is not soliciting an offer to buy these  securities in any state where the offer
or sale is not permitted.

                  THE DATE OF THIS PROSPECTUS IS ________, 2005

<PAGE>

                                TABLE OF CONTENTS

                                                                            Page

Prospectus Summary                                                             1
Risk Factors                                                                   2
Forward-Looking Statements                                                     9
Use of Proceeds                                                                9
Selling Stockholders                                                          10
Plan of Distribution                                                          12
Description of Securities                                                     13
Market for Common Equity and Related Stockholder Matters                      17
Selected Financial Data                                                       18
Description of Business                                                       19
Description of Property                                                       26
Legal Proceedings                                                             26
Supplementary Financial Information                                           27
Management's Discussion and Analysis of Financial Condition and
        Results of Operations                          29
Quantitative and Qualitative Disclosure About Market Risk                     36
Management                                                                    37
Executive Compensation                                                        39
Security Ownership of Certain Beneficial Owners and Management                41
Certain Relationships and Related Transactions                                43
Commission Position on Indemnification for Securities Act Liabilities         44
Legal Matters                                                                 44
Experts                                                                       45
Where you can find more Information                                           45
Index to Consolidated Financial Statements                                   F-1

<PAGE>

                               PROSPECTUS SUMMARY

         The following summary highlights selected information contained in this
prospectus.  This  summary  does not  contain  all the  information  you  should
consider  before  investing  in the  securities.  Before  making  an  investment
decision,  you should read the entire prospectus carefully,  including the "Risk
Factors"  section,  the  financial  statements  and the  notes to the  financial
statements.  As used throughout this  prospectus,  the terms  "AccuPoll,"  "we,"
"us," and "our" refer to AccuPoll Holding Corp.

                             ACCUPOLL HOLDING CORP.

         We have  developed a direct  recording  electronic  voting machine that
provides a  voter-verified  paper  audit  trail  that is both human and  machine
readable. We intend to market our voting machine and its associated products and
services for use in federal, state, local and private elections.

         We have incurred losses since our inception. For the three months ended
September  30,  2004,  we had  revenues of $494,244  and  incurred a net loss of
$3,687,072.  For the fiscal  years ended June 30,  2004,  2003 and 2002,  we had
revenues of $1,508,656,  $0 and $0, respectively,  and we incurred net losses of
$15,379,253, $4,848,567 and $2,406,580,  respectively. At September 30, 2004, we
had a working  capital  deficiency of $6,222,844 and an  accumulated  deficit of
$26,321,472.  As a result,  our  auditors,  in their report dated  September 27,
2004,  have expressed  substantial  doubt about our ability to continue as going
concern.

         Our principal executive offices are located at 15101 Red Hill Ave., Ste
220, Tustin, CA 92780. Our telephone number is (949) 200-4000.

                                  THE OFFERING

Common stock outstanding
before the offering ..................213,871,410 shares as of December 31, 2004

Common stock offered by
selling stockholders ...................Up  to  105,818,544  shares,   based  on
                                        current  market prices and assuming full
                                        exercise  of  outstanding  common  stock
                                        purchase   warrants   by   the   selling
                                        stockholders.   This  number  represents
                                        approximately   46.7%  of  our   current
                                        outstanding  stock  and  includes  up to
                                        79,832,045   shares  of   common   stock
                                        issuable   pursuant   to  common   stock
                                        purchase warrants, which includes a good
                                        faith estimate of shares of common stock
                                        to account  for  antidilution  and price
                                        protection adjustments.

Common stock to be outstanding
after the offering .....................Up to 293,705,455 shares

Use of proceeds ........................We will not  receive any  proceeds  from
                                        the sale of the common stock  hereunder.
                                        We will, however, receive the sale price
                                        of any common  stock we sell for cash to
                                        the selling  stockholders  upon exercise
                                        of warrants. See "Use of Proceeds" for a
                                        complete description.

OTCBB Symbol ...........................ACUP.OB

                                       1

<PAGE>

                                  RISK FACTORS

         This investment has a high degree of risk. Before you invest you should
carefully  consider the risks and  uncertainties  described  below and the other
information in this  prospectus.  Each of the following risks may materially and
adversely  affect our business,  results of operations and financial  condition.
These risks may cause the market price of our common stock to decline, which may
cause you to lose all or a part of the money you paid to buy our common stock.

         We provide the following cautionary discussion of risks,  uncertainties
and possible inaccurate  assumptions  relevant to our business and our products.
These are  factors  that we think  could  cause  our  actual  results  to differ
materially from expected results.

RISKS RELATING TO OUR BUSINESS

WE HAVE INCURRED SIGNIFICANT LOSSES TO DATE AND MAY NEVER BE PROFITABLE.

         We began our  current  operations  on August 9, 2001 and have  incurred
significant  operating  losses during each fiscal period since that date. We had
no revenues during the period from  commencement of our voting system operations
through  September 30, 2004.  Revenues from our wholly owned subsidiary Z Prompt
were  $494,244  for the three months ended  September  30, 2004.  For the fiscal
years ended June 30, 2004, 2003 and 2002, we incurred net losses of $15,379,253,
$4,848,567 and $2,406,580, respectively. At September 30, 2004, we had a working
capital deficiency of $6,222,844 and an accumulated deficit of $26,321,472. As a
result,  our auditors,  in their report dated September 27, 2004, have expressed
substantial doubt about our ability to continue as going concern. We expect that
we will  incur  significant  operating  losses  and  negative  cash  flows  from
operations for the foreseeable  future. If our losses continue and we are unable
to commercialize, manufacture and market our products successfully, we may never
generate  sufficient  revenues to achieve  profitability  or positive cash flows
from operations.

OUR SUBSIDIARY,  Z PROMPT, INC. HAS FILED A PETITION FOR RELIEF UNDER CHAPTER 11
OF THE UNITED STATES BANKRUPTCY CODE AND WE MAY LOSE OUR ENTIRE INTEREST IN IT.

         On March 23, 2004, our wholly owned subsidiary, Z prompt, Inc., filed a
petition for relief under  Chapter 11 of the United  States  Bankruptcy  Code. Z
prompt continues to conduct business  activities as a  debtor-in-possession.  We
cannot predict the outcome of this proceeding and it involves numerous risks and
uncertainties, such as:

     o    The appointment of a trustee;

     o    The ability of creditors to obtain relief from the automatic stay;

     o    The continued willingness of customers to do business with Z prompt;

     o    The ability of Z prompt to obtain financing on acceptable terms;

     o    The  outcome  of any  adversary  proceedings  that have been or may be
          commenced by or against Z prompt;

     o    The possible  conversion of the case to liquidation under Chapter 7 of
          the Bankruptcy Code or dismissal of the case;

     o    The  ability to obtain  confirmation  of a plan of  reorganization  on
          terms  acceptable to us; and

     o    The ability of Z prompt to successfully  execute any confirmed plan of
          reorganization.

         In  addition,  Z prompt will incur legal and other fees and expenses in
connection with the bankruptcy  proceedings and we may not be able to fund these
costs. Z prompt has been our only source of consolidated revenues since November
1,  2003,  the date on which  the  acquisition  was  recognized  for  accounting
purposes.  If Z prompt is unable to reorganize  successfully,  we could lose our
entire interest in it.

                                       2

<PAGE>

IF WE ARE UNABLE TO OBTAIN  ADDITIONAL  FINANCING,  WE WILL HAVE TO  DISCONTINUE
OPERATIONS.

         We require approximately $2,500,000 in additional financing in order to
be able to continue  operations  over the next twelve  months.  With our current
capital, we expect that we can continue operations for approximately two months.
In the past, our capital  requirements have been met through sales of our common
stock and convertible  notes. We cannot assure you that we will be able to raise
new capital or that  sources of capital will be available to us on terms that we
find acceptable.  If we are unable to obtain additional  financing on acceptable
terms,  we  will  be  unable  to  continue  operations.  Moreover,  if we  raise
additional  capital through  borrowing or other debt  financing,  we would incur
substantial   interest  expense.   Sales  of  additional  equity  securities  or
securities  convertible  into equity  securities  will result in dilution to our
present stockholders.

IF WE ARE  UNABLE TO EXPAND  OUR  SALES,  MARKETING,  DISTRIBUTION  AND  SERVICE
CAPABILITIES  OR ENTER INTO  AGREEMENTS  WITH THIRD PARTIES TO DO SO, WE WILL BE
UNABLE TO SUCCESSFULLY MARKET AND SELL OUR PRODUCTS.

         We  currently   have  limited   sales,   marketing   and   distribution
capabilities and limited service capabilities.  If we are unable to expand these
capabilities  either by developing  our own sales,  marketing,  distribution  or
service organization or by entering into agreements with others at a competitive
cost, we will be unable to market and successfully sell our products. We plan to
enter into  strategic  relationships  with other  companies to provide  services
relating to our products,  including  product rollout  support,  election worker
education,  help desk, and break/fix support.  We cannot assure you that we will
be able to develop and maintain successful  relationships on terms acceptable to
us. The failure to do so could materially and adversely affect the marketing and
sale of our products.

WE RELY ON A THIRD  PARTY  MANUFACTURER.  TO THE EXTENT  THAT THIS  MANUFACTURER
EXPERIENCES  FINANCIAL  OR  OPERATIONAL  DIFFICULTIES,  OUR  BUSINESS  COULD  BE
INTERRUPTED.

         We currently  rely, and expect to continue to rely, on a third party to
manufacture  our  product.  Our  agreement  requires  us to acquire  the product
exclusively from this manufacturer unless the manufacturer is unable to meet our
requirements on time. To the extent that this manufacturer experiences financial
or  operational   difficulties,   our  business  could  be  interrupted.   These
difficulties  could  inhibit  our  ability to  provide  products  in  sufficient
quantities with  acceptable  quality and at an acceptable cost to our customers.
Any disruption in supply of our product from this manufacturer would cause us to
delay delivery to our customers that could lead to a loss of sales and revenues.

MANY OF OUR  COMPETITORS  ARE  LARGER  AND  HAVE  GREATER  FINANCIAL  AND  OTHER
RESOURCES  THAN WE DO AND THOSE  ADVANTAGES  COULD MAKE IT  DIFFICULT  FOR US TO
COMPETE WITH THEM.

         We  expect   significant   competition   from  existing  and  potential
competitors. We may not have the financial resources, technical expertise, sales
and marketing abilities or support capabilities to compete successfully. Many of
our  existing   competitors   have  greater   market   penetration,   brand-name
recognition,  market  presence,  engineering  and  marketing  capabilities,  and
financial, technological and personnel resources than we do. As a result, we may
not be able to compete effectively, which could prevent us from implementing our
business strategy.

IF WE CANNOT MEET THE LEGAL  REQUIREMENTS  AND OTHER  PROCEDURES WITH RESPECT TO
GOVERNMENT  PROCUREMENT  WE WILL NOT BE ABLE TO SELL OUR  VOTING  SYSTEM AND OUR
BUSINESS WILL BE MATERIALLY ADVERSELY AFFECTED.

         Because we plan to sell our  products to  government  agencies,  we are
subject to laws,  regulations and other  procedures that govern  procurement and
contract  implementation by those agencies.  These agencies are likely to impose
vendor  qualification  requirements,   such  as  requirements  with  respect  to
financial  condition,   insurance  and  operational  history.  We  have  limited
experience  with  government  procurement  and cannot assure you that we will be
able to meet existing or future procurement laws,  regulations and procedures or
that we will be able to qualify as a vendor.  Some  procurement  processes could
involve an extensive period of product evaluation,  including  evaluation by the
public.  Compliance with government  procurement and qualification  requirements
could significantly delay sales of our products.  Delays could also occur due to
protests of bid  specifications  or challenges to contract awards. If we fail to
comply with an agency's  procurement  or vendor  qualification  requirements  or
procedures,  we will be unable to market and sell our  products to that  agency.
Government  agencies may also impose

                                       3

<PAGE>

contractual   terms  and   conditions,   such  as  warranty,   termination   and
indemnification provisions, that are unfavorable to us.

IF WE ARE UNABLE TO RETAIN THE SERVICES OF MESSRS. DENNIS VADURA AND FRANK WIEBE
OR IF WE ARE UNABLE TO SUCCESSFULLY RECRUIT QUALIFIED  PERSONNEL,  WE MAY NOT BE
ABLE TO CONTINUE OPERATIONS.

         Our  future  performance  depends   significantly  upon  the  continued
contributions of both Mr. Dennis Vadura,  our chief executive  officer,  and Mr.
Frank J. Wiebe,  our  president.  The loss of the services of Mr.  Vadura or Mr.
Wiebe could materially and adversely affect our business.  We may not be able to
retain  these  employees  and  searching  for their  replacements  could  divert
attention from senior management and delay our ability to implement our business
strategy. While we maintain employment agreements with Messrs. Vadura and Wiebe,
they may terminate their  relationship  with us at any time. We are not aware of
any  plans by  Messrs.  Vadura or Wiebe to leave  us.  If we are  successful  in
implementing  and  developing  our  business,  we  expect  that we will  need to
increase our  workforce.  Accordingly,  our future success will likely depend on
our  ability to  attract,  hire,  train and retain  highly  skilled  management,
technical,  sales,  marketing and customer  support  personnel.  Competition for
qualified  employees  is  intense  and  our  financial  resources  are  limited.
Consequently,  we may not be  successful  in  attracting,  hiring,  training and
retaining the personnel we need, which would impede our ability to implement our
business strategy.

IF WE DO NOT  SUCCESSFULLY  IMPROVE AND DEVELOP NEW PRODUCTS AND  SERVICES,  OUR
BUSINESS WILL BE HARMED.

         We  expect  that the pace of  technological  advances  in the  computer
voting  machine  industry  will  rapidly   increase.   Our  ability  to  compete
successfully  is heavily  dependent  upon our ability to ensure a continuous and
timely flow of competitive  products and technology into the marketplace.  If we
do not successfully develop new and improved technologies,  our business will be
harmed.

WE MAY  ACQUIRE  OTHER  BUSINESSES  AND OUR  BUSINESS  COULD BE  MATERIALLY  AND
ADVERSELY AFFECTED AS A RESULT OF ANY OF THESE ACQUISITIONS.

         We  are  looking  for  strategic  opportunities  to  grow  our  product
offerings through acquisitions or strategic investments.  In this regard, during
the year ended June 30,  2004,  we entered  into an agreement to purchase all of
the  outstanding  shares of Z prompt,  Inc. that was  recognized  for accounting
purposes  during our fiscal quarter ended  December 31, 2003. In the future,  we
may acquire or make strategic investments in other complementary  businesses. We
have limited experience in acquiring or investing in other businesses and we may
not be successful in completing,  financing, or integrating an acquired business
into our existing operations.

         Any such  acquisitions  could  involve the dilutive  issuance of equity
securities  and the  incurrence  of  debt.  In  addition,  although  we have not
experienced any of these problems to date, the acquisition of Z prompt, Inc. and
future acquisitions pose numerous additional risks, such as:

     o    unanticipated costs associated with the acquisition or investment;

     o    diversion of management time and resources;

     o    problems in assimilating and integrating the new business operations;

     o    potential loss of key customers or personnel of an acquired company;

     o    increased legal and compliance costs; and

     o    unanticipated liabilities of an acquired company.

         Further,  although an acquired  company may have already  developed and
marketed  products,  we can not assure you that the products will continue to be
successful,  that product  enhancements will be made in a timely fashion or that
pre-acquisition  due diligence  will have  identified  all possible  issues that
might arise with respect to the acquired  company or its products and that could
materially and adversely affect our business.

                                       4

<PAGE>

RISKS RELATING TO OUR TECHNOLOGY

IF OUR PRODUCTS FAIL TO PERFORM  PROPERLY,  OUR REPUTATION COULD BE DAMAGED,  WE
COULD  LOSE  POTIENTIAL  SALES  AND  CUSTOMERS  AND WE COULD  INCUR  SIGNIFICANT
LIABILITIES.

         Our  products  incorporate  a number  of  intricate  computer  software
programs  and hardware  components  that must work  seamlessly  in order for our
voting machine to function correctly.  While we expect our product to perform to
federal  voting  system  standards,  we cannot  assure you that it will function
properly at all times. If our system's software programs or hardware  components
experience   failure  or   malfunction   or  are   alleged  to  have  failed  or
malfunctioned,  we  are  likely  to  receive  significant  adverse  publicity  -
particularly  if the  failure is alleged to have had an effect on the outcome of
an  election.  As a result,  our  reputation  could be  damaged,  we could  lose
potential sales and customers and we could incur significant liabilities.

IF WE DO NOT ADEQUATELY  PROTECT OUR INTELLECTUAL  PROPERTY RIGHTS, OUR BUSINESS
WILL BE HARMED.

         We have applied to the United States Patent and Trademark  Office for a
systems and method patent with respect to our  electronic  voting system and for
trademark  registration  with respect to the AccuPoll  name and logo.  We cannot
assure you that a patent will be issued or our trademarks will be registered. If
issued,  we cannot  assure  you that we will be able to defend  or  enforce  the
patent,  trademark or other intellectual property rights that we may have in our
products,   name  or  logo.   Although  we  may  initiate   litigation  to  stop
infringement,  intellectual  property  litigation  is often  expensive and could
consume our limited  financial  resources.  Additionally,  third  parties may be
better  able to sustain the costs of  litigation.  If we are unable to defend or
enforce our rights,  other parties may be able to use our  technologies  without
paying  any  compensation  to us.  Furthermore,  we cannot  assure  you that our
competitors  will not  design  around any issued  patents,  or improve  upon our
technology,  or that we will be able to detect  infringements.  Also,  we cannot
assure you that others will not assert  rights in, or ownership  of,  trademarks
and other  proprietary  rights  of ours or that we will be able to  successfully
resolve  these  types of  conflicts.  If we are unable to  establish,  defend or
enforce rights to our technology, our business may be materially harmed.

RISKS RELATING TO REGULATION

EACH OF OUR VOTING SYSTEM  PRODUCTS MUST MEET  QUALIFICATION  AND  CERTIFICATION
STANDARDS  BEFORE THEY CAN BE SOLD. IF WE ARE NOT ABLE TO OBTAIN  CERTIFICATION,
WE MAY NOT BE ABLE TO GENERATE SUFFICIENT REVENUES TO ACHIEVE PROFITABILITY.

         In the United  States,  our ability to sell our voting system  products
depends on the  qualification  of each product through  independent  testing for
compliance with the federal voting system  standards.  In addition,  most states
require  state-level  certification  before  we may sell our  products  to local
jurisdictions  in  those  states.  Moreover,  local  jurisdictions  may  require
acceptance  level  testing.  In March 2004,  our voting  system was qualified as
complying with the 1990 federal voting system standards as to hardware, and 2002
federal  voting  system  standards  as to  software,  and has been  subsequently
certified by the states of Alabama, Arkansas, Kentucky, Mississippi, Ohio, South
Dakota, Utah and West Virginia.  We are seeking full qualification of our voting
system under the 2002 federal voting system standards but cannot assure you that
we will obtain that  qualification.  We cannot assure you that our products will
be certified by additional  states. If we are unable to obtain  certification in
additional states, we may not be able to generate sufficient revenues to achieve
profitability.

IF STATE ELECTION  OFFICIALS  DECERTIFY OUR PRODUCTS WE WILL NOT BE ABLE TO SELL
OUR PRODUCTS IN THOSE STATES AND OUR  REPUTATION  AND BUSINESS MAY BE MATERIALLY
HARMED.

         If certified in a state, our products will be subject to ongoing review
and the state may withdraw certification.  For example, the California Secretary
of State  has  issued  an order  withdrawing  certification  of  certain  of our
competitors'  products.  We cannot  assure  you that a state  will not  withdraw
certification  of our  products  on the basis  that the  product  is  defective,
obsolete or otherwise  unacceptable for use. If  certification is withdrawn,  we
will not be able to  continue to sell the product in the state and are likely to
receive  significant  adverse  publicity.  As a result,  our reputation could be
materially  damaged,  causing us to lose potential sales and customers in other
jurisdictions.

                                       5

<PAGE>

CHANGING FEDERAL VOTING SYSTEM  STANDARDS,  STATE  CERTIFICATION AND OTHER LEGAL
REQUIREMENTS  PERTAINING TO OUR PRODUCTS WILL MAKE IT DIFFICULT FOR US TO OBTAIN
CERTIFICATION OF OUR VOTING SYSTEM.

         The market for computerized  voting machines and related  equipment for
use in federal,  state, local and other elections,  is changing as new technical
standards are considered. We expect that federal voting system standards,  state
certification  and other legal  requirements  will change. We may not be able to
anticipate  new standards or changes to existing  standards and we cannot assure
you that our products will comply, or can be modified to comply with, any new or
changed  standards or requirements  that may be adopted.  If our products do not
comply  and  cannot be  modified  to comply  with new or  changed  standards  or
requirements, we may not be able to obtain certification of our voting system.

WE MAY NOT BE ABLE TO OBTAIN  FEDERAL AND STATE  CERTIFICATION  OF PRODUCTS IN A
TIMELY MANNER, WHICH COULD DELAY THE MARKETING AND SALES OF OUR PRODUCTS.

         Independent  testing  authorities test and certify our products.  There
are a  limited  number  of  testing  authorities  able to test and  certify  our
products in accordance  with federal voting system  standards.  These  companies
also  conduct  testing  and  certification  for our  competitors.  Any delays or
disruptions in the services provided by our independent  testing  authorities is
likely  to  affect  our  ability  to  market  and sell our  products  and  could
materially   and  adversely   impact  our  sales  and  our  ability  to  achieve
profitability.

RISKS RELATING TO OUR CURRENT FINANCING ARRANGEMENTS

THERE ARE A LARGE NUMBER OF SHARES UNDERLYING WARRANTS THAT MAY BE AVAILABLE FOR
FUTURE SALE AND THE SALE OF THESE  SHARES MAY  DEPRESS  THE MARKET  PRICE OF OUR
COMMON STOCK.

         As of December 31,  2004,  we had  213,873,410  shares of common  stock
issued  and  outstanding.  There are  79,832,045  shares of common  stock  being
offered pursuant to this prospectus that are issuable upon exercise of currently
outstanding warrants.  All of these shares may be sold without restriction.  The
sale of these shares may adversely affect the market price of our common stock.

THE  ISSUANCE  OF SHARES  UPON  EXERCISE OF  WARRANTS  MAY CAUSE  IMMEDIATE  AND
SUBSTANTIAL DILUTION TO OUR EXISTING STOCKHOLDERS.

         The  issuance  of  shares  upon  exercise  of  warrants  may  result in
substantial  dilution to the interests of other  stockholders  since the selling
stockholders  may  ultimately  convert  or  exercise  and sell  the full  amount
issuable on conversion or exercise.

IF WE ENGAGE IN A LOWER PRICED  TRANSACTION THAN OUR SEPTEMBER AND NOVEMBER 2004
FINANCING  ARRANGEMENTS  WHILE THE RELATED  WARRANTS ARE  OUTSTANDING,  THEN THE
EXERCISE PRICE OF THE WARRANTS WILL BE ADJUSTED TO THE LOWER  TRANSACTION  PRICE
AND WE MAY BE  REQUIRED  TO  ISSUE  ADDITIONAL  SHARES  OF  COMMON  STOCK TO THE
INVESTORS. IF THIS OCCURS, THE NUMBER OF SHARES WHICH ARE REGISTERED PURSUANT TO
THIS PROSPECTUS MAY NOT BE ADEQUATE.  ACCORDINGLY,  WE MAY BE REQUIRED TO FILE A
SUBSEQUENT  REGISTRATION  STATEMENT COVERING ADDITIONAL SHARES. IF THE SHARES WE
HAVE ALLOCATED AND ARE REGISTERING HEREWITH ARE NOT ADEQUATE AND WE ARE REQUIRED
TO FILE AN ADDITIONAL  REGISTRATION STATEMENT, WE MAY INCUR SUBSTANTIAL COSTS IN
CONNECTION THEREWITH.

         We have allocated and registered  79,832,045  shares of common stock to
cover  the  exercise  of  warrants  in  this  offering.  Our  current  financing
arrangement includes  restrictions on engaging in a subsequent financing that is
priced  lower  than the  current  arrangement.  If we engage  in a lower  priced
transaction  while the warrants are outstanding,  then the exercise price of our
warrants will be adjusted to the lower  transaction  price.  In addition,  if we
engage in a lower priced  transaction  without the consent of the investors,  we
will have to issue, for each such occasion, additional shares of common stock to
each  investor  so that the average  per share  purchase  price of the shares of
common  stock  issued to the  investors  is equal to such other  lower price per
share. If this occurs, the number of registered shares issuable upon exercise of
the  warrants  may not be  adequate.  Accordingly,  we may be required to file a
subsequent  registration  statement covering additional shares. If the shares we
have  allocated  to the  registration  statement  are  not  adequate  and we are
required to file an additional  registration statement, we may incur

                                       6

<PAGE>

substantial  costs  in  connection  with  the  preparation  and  filing  of such
registration statement.

RISKS RELATING TO OUR SECURITIES

SOME HOLDERS OF OUR SECURITIES MAY HAVE THE RIGHT TO RESCIND THEIR PURCHASES. IF
THESE  SECURITY  HOLDERS  EXERCISE THEIR RIGHT TO RESCIND THEIR  PURCHASES,  OUR
OPERATIONS WILL BE MATERIALLY ADVERSELY AFFECTED.

         We have  offered  and sold a  substantial  number  of  shares of common
stock,   and  warrants  and  options  to  purchase  our  common  stock   without
registration  under the  Securities  Act of 1933, as amended,  or  qualification
under  state  securities  laws.  If any offer or sale were not exempt  from,  or
otherwise  not subject  to,  federal and state  registration  and  qualification
requirements, the purchaser would have a number of remedies, including the right
to rescind the purchase.  The Securities Act of 1933, as amended,  requires that
any claim for rescission be brought within one year of the alleged violation. We
have  sold  approximately  9,768,000  shares of common  stock and  warrants  and
options to purchase  shares of common stock in the United States within one year
of September 30, 2004. The time periods within which claims for rescission  must
be brought  under state  securities  laws vary and may be two years or more from
the date of the alleged violation. We have sold approximately  14,000,000 shares
of common stock and  warrants and options to purchase  shares of common stock in
the United  States within two years of September  30, 2004.  Further,  we cannot
assure you that courts will not apply equitable or other doctrines to extend the
period within which  purchasers  may bring their claims.  The number of warrants
and options  described above does not include warrants and options to purchase a
total of 3,600,000  shares of common stock issued  within two years of September
30, 2004 to our chief executive officer, Dennis Vadura, and our president, Frank
Wiebe, or a warrant to purchase  12,400,000 shares of common stock for which the
holder  has agreed in  writing  that it will not assert any right to  rescission
that it may  have.  However,  we  cannot  assure  you  that  this  agreement  is
enforceable.  If any  security  holders  exercise  their right to rescind  their
purchases, our operations will be materially adversely affected.

         Should  federal or state  securities  regulators  deem it  necessary to
bring  administrative  or legal  actions  against  us based  upon a  failure  to
register  or  qualify,  the  defense of any  enforcement  action is likely to be
costly,  distracting to our management and if  unsuccessful  could result in the
imposition of  significant  penalties.  The filing of a claim for  rescission or
enforcement  action against us or our officers or directors could materially and
adversely impact our stock price,  generate  significant  adverse publicity that
materially  affects our sales and materially impair our ability to raise capital
through future sales of our securities.  We may also incur significant  expenses
should we  determine  that it is  advisable  to register  shares  issuable  upon
exercise of  outstanding  warrants or options or upon  conversion of outstanding
notes.

WE HAVE NOT FILED OR SENT INFORMATION  STATEMENTS IN CONNECTION WITH STOCKHOLDER
ACTIONS BY WRITTEN CONSENT.  ANY  ADMINISTRATIVE  OR LEGAL ACTION AGAINST US FOR
NOT FILING OR SENDING SUCH  INFORMATION  STATEMENTS MAY HAVE A MATERIAL  ADVERSE
EFFECT ON OUR BUSINESS.

         In 2002,  we  effected a one for five  reverse  split of our issued and
outstanding  shares of common  stock and filed  amendments  to Article IV of our
articles of  incorporation  to provide for a class of preferred  stock.  Each of
these  actions  required  the approval of our  stockholders  that we believe was
given by written consent. In connection with these written consents,  we did not
file with the Securities and Exchange Commission written information  statements
containing the information  specified in its proxy rules.  Also, we did not send
information  statements  in advance of the action as required by the proxy rules
of the Securities and Exchange  Commission.  Accordingly,  it is possible that a
stockholder could challenge the validity of these actions and the Securities and
Exchange Commission could take enforcement action against us. The defense of any
challenge  or  enforcement  action is likely to be  costly,  distracting  to our
management  and  could  in the  case  of an  enforcement  action  result  in the
imposition of significant penalties. The filing of a stockholder challenge or an
enforcement  action  could  materially  and  adversely  impact our stock  price,
generate  significant  adverse publicity that materially  affects our sales, and
materially  impair our  ability to raise  capital  through  future  sales of our
securities.

                                       7

<PAGE>

THERE  ARE A LARGE  NUMBER  OF  SHARES  UNDERLYING  OUR  OUTSTANDING  DERIVATIVE
SECURITIES THAT MAY BE AVAILABLE FOR FUTURE SALE. THE EXERCISE OF THESE WARRANTS
AND OPTIONS WILL CAUSE SUBSTANTIAL DILUTION TO OUR EXISTING STOCKHOLDERS

         As of September  30, 2004, we had  outstanding  warrants and options to
purchase 84,537,152 shares of common stock and notes convertible into 55,405,571
shares of common stock.  The exercise  price of the warrants and options  ranges
from $.01 to $1.54 per share and the notes are currently  convertible  at prices
ranging  from  $.0625 to $0.35 per share.  The number of shares of common  stock
issuable  upon  conversion  of certain of the notes may be greater in the future
because the conversion  price is the lower of the specified  price or 50% of the
average  three  lowest  closing  prices for our common stock for the twenty days
immediately  preceding the conversion date. The exercise or conversion prices of
these  securities  are  generally  substantially  lower  than our  stock  price.
Therefore,  holders of our common stock and  potential  investors are subject to
substantial dilution if these securities are exercised or converted.

A DECLINE IN THE PRICE OF OUR COMMON  STOCK  COULD  AFFECT OUR  ABILITY TO RAISE
FURTHER WORKING CAPITAL AND ADVERSELY  IMPACT OUR ABILITY TO CONTINUE OUR NORMAL
OPERATIONS.

         A prolonged  decline in the price of our common stock could result in a
reduction in the liquidity of our common stock and a reduction in our ability to
raise capital.  Because our operations  primarily have been financed through the
sale of equity  securities,  a decline in the price of our common stock could be
particularly  detrimental to our liquidity and our operations.  We may be forced
to  reallocate  funds from other  planned  uses which  would have a  significant
negative effect on our business plans and  operations,  including our ability to
develop new products and  continue  our current  operations.  If our stock price
declines,  there can be no  assurance  that we will be able to raise  additional
capital or generate funds from operations sufficient to meet our obligations. If
we are unable to raise  sufficient  capital in the  future,  we may not have the
resources to continue our normal operations.

OUR HISTORIC  STOCK PRICE HAS BEEN  VOLATILE AND THE FUTURE MARKET PRICE FOR OUR
COMMON STOCK IS LIKELY TO CONTINUE TO BE VOLATILE.  FURTHER,  THE LIMITED MARKET
FOR OUR SHARES WILL MAKE OUR PRICE MORE VOLATILE. THIS MAY MAKE IT DIFFICULT FOR
YOU TO SELL OUR COMMON STOCK FOR A POSITIVE RETURN ON YOUR INVESTMENT.

         The  public  market  for our common  stock has  historically  been very
volatile.  Over the past two fiscal years, the market price for our common stock
has ranged  from  $0.06 to $3.85 (See  "Market  for  Common  Equity and  Related
Stockholder  Matters").  Any  future  market  price for our  shares is likely to
continue to be very volatile.  This price  volatility may make it more difficult
for you to sell  shares when you want at prices you find  attractive.  We do not
know of any one particular factor that has caused volatility in our stock price.
However,  the stock market in general has  experienced  extreme price and volume
fluctuations that have often been unrelated or disproportionate to the operating
performance  of  companies.  Broad  market  factors and the  investing  public's
negative  perception  of our business may reduce our stock price,  regardless of
our operating  performance.  Further, the market for our common stock is limited
and we  cannot  assure  you that a  larger  market  will  ever be  developed  or
maintained.  The daily  trading  volume of our  common  stock over the past nine
months averaged  approximately 710,690 shares. The last reported sales price for
our common stock on January 19, 2005, was $0.093 per share.  Market fluctuations
and volatility,  as well as general economic,  market and political  conditions,
could  reduce our  market  price.  As a result,  this may make it  difficult  or
impossible for you to sell our common stock.

OUR  COMMON  STOCK IS  SUBJECT  TO THE  "PENNY  STOCK"  RULES OF THE SEC AND THE
TRADING MARKET IN OUR  SECURITIES IS LIMITED,  WHICH MAKES  TRANSACTIONS  IN OUR
STOCK CUMBERSOME AND MAY REDUCE THE VALUE OF AN INVESTMENT IN OUR STOCK.

         The  Securities  and Exchange  Commission has adopted Rule 3a51-1 which
establishes the definition of a "penny stock," for the purposes  relevant to us,
as any equity  security  that has a market price of less than $5.00 per share or
with an  exercise  price of less  than  $5.00  per  share,  subject  to  certain
exceptions.  For any transaction  involving a penny stock,  unless exempt,  Rule
15g-9 requires:

     o    that a broker or dealer approve a person's account for transactions in
          penny stocks; and

     o    the broker or dealer receive from the investor a written  agreement to
          the transaction,  setting forth

                                       8

<PAGE>

          the identity and quantity of the penny stock to be purchased

         In order to  approve  a  person's  account  for  transactions  in penny
stocks, the broker or dealer must:

         o        obtain   financial   information  and  investment   experience
                  objectives of the person; and

         o        make a reasonable determination that the transactions in penny
                  stocks  are  suitable  for  that  person  and the  person  has
                  sufficient knowledge and experience in financial matters to be
                  capable  of  evaluating  the  risks of  transactions  in penny
                  stocks.

        The broker or dealer must also deliver,  prior to any  transaction  in a
penny stock, a disclosure  schedule  prescribed by the SEC relating to the penny
stock market, which, in highlight form:

         o        sets  forth the basis on which the  broker or dealer  made the
                  suitability  determination;  and

         o        that the broker or dealer received a signed, written agreement
                  from the investor prior to the transaction.

         Generally,  brokers  may be less  willing  to execute  transactions  in
securities  subject to the "penny stock" rules.  This may make it more difficult
for  investors  to dispose of our common stock and cause a decline in the market
value of our stock.

         Disclosure  also has to be made about the risks of  investing  in penny
stocks  in  both  public  offerings  and in  secondary  trading  and  about  the
commissions payable to both the broker-dealer and the registered representative,
current  quotations for the securities and the rights and remedies  available to
an  investor  in cases of fraud in penny stock  transactions.  Finally,  monthly
statements  have to be sent  disclosing  recent price  information for the penny
stock held in the account and information on the limited market in penny stocks.

                           FORWARD-LOOKING STATEMENTS

         Information in this prospectus  contains  "forward-looking  statements"
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section  21E  of  the  Securities  Exchange  Act  of  1934,  as  amended.  These
forward-looking  statements  can be  identified  by the  use of  words  such  as
"believes,"   "estimates,"  "could,"  "possibly,"   "probably,"   "anticipates,"
"projects," "expects," "may," "will," or "should" or other variations or similar
words.  No assurances  can be given that the future  results  anticipated by the
forward-looking  statements will be achieved.  The following matters  constitute
cautionary  statements  identifying  important  factors  with  respect  to those
forward-looking statements, including certain risks and uncertainties that could
cause actual results to vary materially  from the future results  anticipated by
those  forward-looking  statements.  Among  the key  factors  that have a direct
bearing on our results of  operations  are the  effects of various  governmental
regulations, the fluctuation of our direct costs and the costs and effectiveness
of our operating strategy.

                                 USE OF PROCEEDS

         This  prospectus  relates  to shares of our  common  stock  that may be
offered  and sold from  time to time by the  selling  stockholders.  We will not
receive any proceeds  from the sale of shares of common stock in this  offering.
However,  we will receive the sale price of any common stock we sell for cash to
the selling  stockholders  upon exercise of the  warrants.  We expect to use the
proceeds received from the exercise of the warrants, if any, for general working
capital purposes.

                                       9

<PAGE>

                              SELLING STOCKHOLDERS

         The  following  table  presents   information   regarding  the  selling
stockholders as of January 21, 2005.  Assuming all the shares  registered hereby
are sold by the  selling  stockholders,  none of the selling  stockholders  will
continue  to own any  shares of our common  stock.  Unless  otherwise  indicated
below, (a) none of the selling stockholders has had a material relationship with
us or any of our predecessors or affiliates within the past three years, and (b)
none of the selling  stockholders is a registered  broker-dealer or an affiliate
of a registered broker-dealer.

<TABLE>
<CAPTION>
                                                   NUMBER OF SHARES                                 SHARES BENEFICIALLY OWNED
                                                  BENEFICIALLY OWNED                                  AFTER THE OFFERING (3)
NAME                                           PRIOR TO THE OFFERING (1)   TOTAL SHARES OFFERED (2)   NUMBER        PERCENT
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                <C>                          <C>                     <C>           <C>
AJW Offshore, Ltd. (4)                               3,822,500                   6,116,000               0             0%
AJW Partners, LLC (5)                                1,675,000                   2,680,000               0             0%
AJW Qualified Partners, LLC (6)                      4,242,500                   6,788,000               0             0%
Double U Master Fund LP (7)                          3,550,000                   5,680,000               0             0%
Enable Growth Partners L.P. (8)                     10,625,000                  17,000,000               0             0%
Kent A. Mc Naughton Living Trust (9)                    62,500                      62,500               0             0%
Leo Murphy (10)                                        687,500                     687,500               0             0%
Michael R. Hamblett (11)                             1,375,000                   2,200,000               0             0%
New Millennium Capital Partners II, LLC (12)           257,500                     412,000               0             0%
Platinum Partners Value Arbitrage Fund, LP           7,075,000                  11,320,000               0             0%
(13)
Robert B. Lange (14)                                 1,375,000                   1,375,000               0             0%
SRG Capital, LLC (15)                               11,875,000                  19,000,000               0             0%
Todd Mc Nitt (16)                                    1,312,500                   1,312,500               0             0%
Truk International Fund, LP (17)                       831,250                   1,330,000               0             0%
Truk Opportunity Fund, LLC (18)                     11,048,749                  17,669,999               0             0%
J.P. Turner & Company, L.L.C. (19)                   2,125,000                  12,185,045               0             0%
                                                    ----------                 -----------
                                                    61,939,999                 105,818,544
                                                    ==========                 ===========
</TABLE>

(1)      Beneficial  ownership is determined in accordance with the rules of the
         Securities  and Exchange  Commission and generally  includes  voting or
         investment power with respect to securities.  Options and Warrants that
         are currently  exercisable or exercisable within 60 days of January 21,
         2005 are deemed to be  beneficially  owned by the person  holding  such
         securities  for the purpose of computing the percentage of ownership of
         such  person,  but are not  treated as  outstanding  for the purpose of
         computing the percentage ownership of any other person.

(2)      Includes a good faith  estimate of shares of common stock issuable upon
         the  exercise  of  common  stock  purchase   warrants  to  account  for
         antidilution  and price  protection  adjustments,  as  contemplated  by
         certain provisions of the Subscription Agreements.

(3)      Assumes that all securities registered will be sold and that all shares
         of common stock underlying outstanding warrants will be issued.

(4)      Includes (a)  1,529,000  shares of common stock,  (b) 2,293,500  shares
         issuable  upon  exercise of warrants,  and (c) up to  2,293,500  shares
         representing  our  current  good faith  estimate of  additional  shares
         issuable to

                                       10

<PAGE>

         the  holders of the  warrants  to account  for  antidilution  and price
         protection  adjustments,  as contemplated by certain  provisions of the
         Subscription  Agreements.  AJW Offshore,  Ltd. is a private  investment
         fund that is owned by its investors and managed by First Street Manager
         II, LLC.  First Street  Manager II, LLC, of which Corey S.  Ribotsky is
         the fund manager, has voting and investment control over the securities
         owned by AJW Offshore, Ltd.

(5)      Includes  (a) 670,000  shares of common  stock,  (b)  1,005,000  shares
         issuable  upon  exercise of warrants,  and (c) up to  1,005,000  shares
         representing  our  current  good faith  estimate of  additional  shares
         issuable to the holders of the warrants to account for antidilution and
         price protection adjustments,  as contemplated by certain provisions of
         the Subscription Agreements.  AJW Partners, LLC is a private investment
         fund that is owned by its investors and managed by SMS Group,  LLC. SMS
         Group,  LLC, of which Mr. Corey S.  Ribotsky is the fund  manager,  has
         voting  and  investment  control  over  the  securities  owned  by  AJW
         Partners, LLC.

(6)      Includes (a)  1,697,000  shares of common stock,  (b) 2,545,500  shares
         issuable  upon  exercise of warrants,  and (c) up to  2,545,500  shares
         representing  our  current  good faith  estimate of  additional  shares
         issuable to the holders of the warrants to account for antidilution and
         price protection adjustments,  as contemplated by certain provisions of
         the Subscription  Agreements.  AJW Qualified Partners, LLC is a private
         investment  fund  that is owned by its  investors  and  managed  by AJW
         Manager,  LLC, of which Corey S. Ribotsky and Lloyd A. Groveman are the
         fund managers,  have voting and investment  control over the securities
         owned by AJW Qualified Partners, LLC.

(7)      Includes (a)  1,420,000  shares of common stock,  (b) 2,130,000  shares
         issuable  upon  exercise of warrants,  and (c) up to  2,130,000  shares
         representing  our  current  good faith  estimate of  additional  shares
         issuable to the holders of the warrants to account for antidilution and
         price protection adjustments,  as contemplated by certain provisions of
         the  Subscription  Agreements.  Murray  Todd has voting and  investment
         control over the securities owned by Double U Master Fund LP.

(8)      Includes (a)  4,250,000  shares of common stock,  (b) 6,375,000  shares
         issuable  upon  exercise of warrants,  and (c) up to  6,375,000  shares
         representing  our  current  good faith  estimate of  additional  shares
         issuable to the holders of the warrants to account for antidilution and
         price protection adjustments,  as contemplated by certain provisions of
         the  Subscription  Agreements.  Mitch Levine has voting and  investment
         control over the securities owned by Enable Growth Partners LP.

(9)      Includes  currently  outstanding shares of common stock issued pursuant
         to a private placement completed in July 2004.

(10)     Includes  currently  outstanding shares of common stock issued pursuant
         to a private placement completed in July 2004.

(11)     Includes  (a)  550,000  shares  of common  stock,  (b)  825,000  shares
         issuable  upon  exercise  of  warrants,  and (c) up to  825,000  shares
         representing  our  current  good faith  estimate of  additional  shares
         issuable to the holders of the warrants to account for antidilution and
         price protection adjustments,  as contemplated by certain provisions of
         the Subscription Agreements.

(12)     Includes  (a)  103,000  shares  of common  stock,  (b)  154,500  shares
         issuable  upon  exercise  of  warrants,  and (c) up to  154,500  shares
         representing  our  current  good faith  estimate of  additional  shares
         issuable to the holders of the warrants to account for antidilution and
         price protection adjustments,  as contemplated by certain provisions of
         the Subscription  Agreements.  New Millennium Capital Partners II, LLC,
         is a private investment fund that is owned by its investors and managed
         by First Street Manager II, LLC. First Street Manager II, LLC, of which
         Corey S.  Ribotsky  is the fund  manager,  has  voting  and  investment
         control over the securities  owned by New Millennium  Capital  Partners
         II, LLC.

(13)     Includes (a)  2,830,000  shares of common stock,  (b) 4,245,000  shares
         issuable  upon  exercise of warrants,  and (c) up to  4,245,000  shares
         representing  our  current  good faith  estimate of  additional  shares
         issuable to the holders of the warrants to account for antidilution and
         price protection adjustments,  as contemplated by certain provisions of
         the Subscription  Agreements.  Mark Nordlicht has voting and investment
         control over the securities owned by Platinum  Partners Value Arbitrage
         Fund, LP.

(14)     Includes  currently  outstanding shares of common stock issued pursuant
         to a private placement completed in July 2004.

(15)     Includes (a)  4,750,000  shares of common stock,  (b) 7,125,000  shares
         issuable  upon  exercise of warrants,  and (c) up to  7,125,000  shares
         representing  our  current  good faith  estimate of  additional  shares
         issuable to the holders of the warrants to account for antidilution and
         price protection adjustments,  as contemplated by certain provisions of
         the Subscription  Agreements.  Edwin Mecabe and Tai May Lee have voting
         and investment control over the securities owned by SRG Capital, LLC.

                                       11

<PAGE>

(16)     Includes  currently  outstanding shares of common stock issued pursuant
         to a private placement completed in July 2004.

(17)     Includes  (a)  332,500  shares  of common  stock,  (b)  498,750  shares
         issuable  upon  exercise  of  warrants,  and (c) up to  498,750  shares
         representing  our  current  good faith  estimate of  additional  shares
         issuable to the holders of the warrants to account for antidilution and
         price protection adjustments,  as contemplated by certain provisions of
         the Subscription Agreements.  Michael E. Fein has voting and investment
         control over the securities owned by Truk International Fund, LP.

(18)     Includes (a)  4,417,499  shares of common stock,  (b) 6,626,250  shares
         issuable upon exercise of outstanding warrants, and (c) up to 6,626,250
         shares  representing  our current  good faith  estimate  of  additional
         shares  issuable  to  the  holders  of  the  warrants  to  account  for
         antidilution  and price  protection  adjustments,  as  contemplated  by
         certain provisions of the Subscription Agreements.  Michael E. Fein has
         voting  and  investment  control  over  the  securities  owned  by Truk
         Opportunity Fund, LLC.

(19)     Includes (a) 2,125,000  shares  issuable  upon exercise of  outstanding
         warrants, (b) up to 4,227,939 shares issuable upon exercise of warrants
         to be issued to J.P. Turner & Company,  L.L.C. as a fee as contemplated
         by certain  provisions  of the  Subscription  Agreement,  and (c) up to
         5,832,106  shares  representing  our good faith  estimate of additional
         shares  issuable  to  the  holders  of  the  warrants  to  account  for
         antidilution  and price  protection  adjustments,  as  contemplated  by
         certain provisions of the Subscription Agreements. Timothy Wayne McAfee
         has voting and  investment  control over the  securities  owned by J.P.
         Turner  &  Company,   L.L.C.  J.P.  Turner  &  Company,   L.L.C.  is  a
         broker-dealer  that acquired these  securities as  compensation  in the
         ordinary course of business.

                              PLAN OF DISTRIBUTION

         The selling stockholders and any of their respective pledgees,  donees,
assignees and other  successors-in-interest  may, from time to time, sell any or
all of their  shares of common  stock on any stock  exchange,  market or trading
facility  on which the shares  are quoted or traded or in private  transactions.
These sales may be at fixed or negotiated prices.  The selling  stockholders may
use any one or more of the following methods when selling shares:

         o        ordinary brokerage  transactions and transactions in which the
                  broker-dealer solicits the purchaser;

         o        block trades in which the  broker-dealer  will attempt to sell
                  the shares as agent but may  position  and resell a portion of
                  the block as principal to facilitate the transaction;

         o        purchases by a  broker-dealer  as principal  and resale by the
                  broker-dealer for its account;

         o        an exchange  distribution  in accordance with the rules of the
                  applicable exchange;

         o        privately-negotiated  transactions;

         o        short  sales  that  are  not   violations   of  the  laws  and
                  regulations of any state or the United States;

         o        broker-dealers may agree with the selling stockholders to sell
                  a specified  number of such shares at a  stipulated  price per
                  share;

         o        through the writing of options on the shares;

         o        a combination of any such methods of sale; and

         o        any other method permitted pursuant to applicable law.

         The selling  stockholders may also sell shares under Rule 144 under the
Securities  Act, if available,  rather than under this  prospectus.  The selling
stockholders  have the sole and absolute  discretion  not to accept any purchase
offer  or make  any  sale of  shares  if they  deem  the  purchase  price  to be
unsatisfactory at any particular time.

         The  selling  stockholders  may also  engage  in puts,  calls and other
transactions  in our securities or derivatives of our securities and may sell or
deliver shares in connection with these trades.

         The  selling  stockholders  or  their  respective   pledgees,   donees,
transferees or other  successors in interest,  may also sell the shares directly
to market makers acting as principals and/or broker-dealers acting as agents for
themselves or their customers.  Such broker-dealers may receive  compensation in
the form of discounts,  concessions or commissions from the selling stockholders
and/or the purchasers of shares for whom such  broker-dealers  may act as agents
or to whom they sell as principal or both, which compensation as to a particular
broker-dealer  might be in excess of customary  commissions.  Market  makers and
block  purchasers  purchasing the shares will do so for their own account and at
their own risk. It is possible that a selling  stockholder  will attempt to sell
shares  of  common

                                       12

<PAGE>

stock in block  transactions to market makers or other purchasers at a price per
share which may be below the then market price. The selling  stockholders cannot
assure that all or any of the shares offered in this  prospectus  will be issued
to, or sold by, the  selling  stockholders.  The  selling  stockholders  and any
brokers, dealers or agents, upon effecting the sale of any of the shares offered
in this prospectus,  may be deemed to be  "underwriters" as that term is defined
under the Securities Act of 1933, as amended,  or the Securities Exchange Act of
1934, as amended,  or the rules and regulations  under such acts. In such event,
any commissions  received by such broker-dealers or agents and any profit on the
resale  of the  shares  purchased  by  them  may be  deemed  to be  underwriting
commissions or discounts under the Securities Act.

         We  are  required  to  pay  all  fees  and  expenses  incident  to  the
registration of the shares,  including fees and  disbursements of counsel to the
selling  stockholders,   but  excluding  brokerage  commissions  or  underwriter
discounts.

         The selling  stockholders,  alternatively,  may sell all or any part of
the  shares  offered  in this  prospectus  through  an  underwriter.  No selling
stockholder  has entered into any agreement with a prospective  underwriter  and
there is no assurance that any such agreement will be entered into.

         The selling stockholders may pledge their shares to their brokers under
the margin provisions of customer agreements. If a selling stockholders defaults
on a margin loan, the broker may, from time to time,  offer and sell the pledged
shares. The selling stockholders and any other persons participating in the sale
or  distribution  of the shares  offered by this  prospectus  will be subject to
applicable  provisions of the Securities  Exchange Act of 1934, as amended,  and
the  rules  and  regulations  under  such act,  including,  without  limitation,
Regulation M. These provisions may restrict certain activities of, and limit the
timing of purchases  and sales of any of the shares by the selling  stockholders
or any other such person. In the event that the selling  stockholders are deemed
affiliated  purchasers  or  distribution  participants  within  the  meaning  of
Regulation M, then the selling  stockholders  will not be permitted to engage in
short sales of common stock. Furthermore, under Regulation M, persons engaged in
a  distribution  of securities are prohibited  from  simultaneously  engaging in
market making and certain other activities with respect to such securities for a
specified  period  of time  prior  to the  commencement  of such  distributions,
subject to specified  exceptions or exemptions.  In regards to short sells,  the
selling  stockholder  can only cover its short position with the securities they
receive from us upon conversion. In addition, if such short sale is deemed to be
a stabilizing  activity,  then the selling  stockholder will not be permitted to
engage in a short sale of our common stock. All of these  limitations may affect
the marketability of the shares.

         We  have  agreed  to  indemnify  the  selling  stockholders,  or  their
transferees or assignees,  against certain  liabilities,  including  liabilities
under the Securities  Act of 1933, as amended,  or to contribute to payments the
selling stockholders or their respective pledgees,  donees, transferees or other
successors in interest, may be required to make in respect of such liabilities.

         If the  selling  stockholders  notify  us  that  they  have a  material
arrangement  with a  broker-dealer  for the resale of the common stock,  then we
would be required to amend the  registration  statement of which this prospectus
is a part, and file a prospectus  supplement to describe the agreements  between
the selling stockholders and the broker-dealer.

                            DESCRIPTION OF SECURITIES

CAPITAL STRUCTURE

         Our authorized  capital consists of 600,000,000 shares of common stock,
par value $.001 per share and 80,000 shares of preferred  stock,  par value $.01
per share.  As of January 21,  2005 we had  213,873,410  shares of common  stock
outstanding and zero shares of preferred stock outstanding.

COMMON STOCK

         Holders of our common stock: (i) have equal ratable rights to dividends
from funds legally available therefor,  when, as and if declared by the Board of
Directors; (ii) are entitled to share ratably in all of our assets available for
distribution to stockholders upon liquidation,  dissolution or winding up of our
affairs;  (iii) do not have preemptive,  subscription or conversion  rights, nor
are there any redemption or sinking fund provisions applicable

                                       13

<PAGE>

thereto;  and (iv) are  entitled  to one vote per share on all  matters on which
stockholders  may vote at all  shareholder  meetings.  The common stock does not
have cumulative  voting rights,  which means that the holders of more than fifty
percent of the common  stock  voting for  election  of  directors  can elect one
hundred percent of our directors if they choose to do so.

PREFERRED STOCK

         Our  Articles of  Incorporation  authorize  80,000  shares of preferred
stock,  $.01 par value per share. Our Board of Directors,  without any action by
stockholders,  is authorized to divide the authorized  shares of preferred stock
into  series  and  to  designate   the  rights,   qualifications,   preferences,
limitations and terms of the shares of any series of preferred stock,  including
but not limited to dividend,  redemption,  voting  rights and  preferences.  The
ability of our Board of  Directors  to  designate  and issue such  shares  could
impede  or deter  an  unsolicited  tender  offer or  takeover  proposal  and the
issuance of additional shares having  preferential rights could affect adversely
the voting power and other rights of holders of our common stock.

         We have not filed a  certificate  of  designation  with  respect to any
series of preferred  stock.  During the year ended June 30,  2003,  we agreed to
issue a total of 71,529  shares of Series A Preferred  Stock as  collateral  for
secured notes. The parties have  subsequently  agreed to cancel the transaction.
On December  31,  2003,  we agreed to issue  8,471  shares of Series A Preferred
Stock to two  stockholders of record in exchange for 3,325,000  shares of common
stock  of  Material  Technologies,  Inc.  On  May 7,  2004,  we  rescinded  this
transaction. Accordingly, we currently do not have any shares of preferred stock
issued or outstanding.

JULY 2004 PRIVATE PLACEMENT

         In July 2004, we completed a private  placement  transaction  with four
accredited  investors,  pursuant to which we sold (1) an  aggregate  of $625,000
principal amount 8% convertible debentures, and (2) warrants to purchase 312,500
shares of our common  stock.  From this  private  placement  we  received  gross
proceeds of  $625,000.  On  September  13,  2004,  we  pre-paid  $312,500 of the
principal  amount of the 8% convertible  debentures  and the remaining  $312,500
principal amount was converted into 3,125,000  shares of our common stock.  Also
on September 13, 2004,  all of the warrants  were  exercised at a price of $0.15
per share  into  312,500  shares of our common  stock.  The  issuance  of the 8%
convertible  debentures,  the  warrants,  and the  shares of common  stock  upon
conversion and exercise of the 8% convertible debentures and warrants was exempt
from  registration  under Rule 506 of  Regulation  D and/or  Section 4(2) of the
Securities  Act of  1933,  as  amended.  We are  registering  in  this  offering
3,437,500  shares  of  common  stock  owned  by the  investors  in this  private
placement  from  the  conversion  of  their 8%  convertible  debentures  and the
exercise of common stock purchase warrants.  J.P. Turner & Company, LLC acted as
placement agent for this  transaction.  For its services as placement  agent, we
issued J.P. Turner & Company, LLC a warrant to purchase 520,833 shares of common
stock,  exercisable  for three years at an exercise price of $0.12 per share. We
are also  registering  in this offering  520,833 shares of common stock issuable
upon exercise of the warrant held by J.P. Turner & Company, LLC.

SEPTEMBER AND NOVEMBER 2004 PRIVATE PLACEMENT

         On September  13, 2004,  we completed a private  placement  transaction
with eleven  accredited  investors,  pursuant to which we sold an  aggregate  of
3,666,447 shares of common stock, 1,833,227 Series A Warrants,  1,833,227 Series
B Warrants and 1,833,227  Series C Warrants (the "First  Closing").  We received
gross proceeds approximating $1,650,000. For each two shares of common stock, we
issued investors one A Warrant, one B Warrant and one C Warrant. Each two shares
and three  warrants were sold at a total price of $0.90.  The private  placement
was exempt from  registration  under Rule 506 of Regulation D of the  Securities
Act of 1933, as amended.

         On November 4, 2004, we completed a private placement  transaction with
the  same  investors  from  the  First  Closing,  pursuant  to  which we sold an
aggregate  of 6,050,000  shares of common  stock,  3,025,000  Series A Warrants,
3,025,000  Series B  Warrants  and  3,025,000  Series C  Warrants  (the  "Second
Closing").  We received gross proceeds totaling $605,000. For each two shares of
common  stock,  we issued  investors  one A  Warrant,  one B  Warrant  and one C
Warrant. Each two shares and three warrants were sold at a total price of $0.20.
The private  placement was deemed exempt from  registration  requirements  under
Rule 506 of Regulation D of the  Securities  Act of 1933. We are  registering in
this offering  6,050,000  shares of common stock and 18,150,000  shares issuable
upon

                                       14

<PAGE>

exercise of these outstanding warrants,  which includes a good faith estimate of
shares  of  common  stock to  account  for  antidilution  and  price  protection
adjustments,   as  contemplated  by  certain   provisions  of  the  Subscription
Agreements.  The terms of the Subscription Agreements and warrants prohibit each
investor  together with its  affiliates  from  exercising  any right which would
result in its beneficial  ownership of more than 9.99% of our outstanding common
stock.

         The Second Closing triggered certain repricing adjustments to the terms
of the First Closing.  Accordingly, the purchase price for the First Closing was
adjusted  to $0.20 for each two shares  and three  warrants  that were sold.  As
adjusted,  we are obligated to issue an additional  12,832,552  shares of common
stock, 6,416,273.  Series A Warrants,  6,416,273 Series B Warrants and 6,416,273
Series C Warrants.  For the First Closing,  we are  registering in this offering
16,498,999  shares of common stock and 49,497,000  shares issuable upon exercise
of warrants,  which  includes a good faith estimate of shares of common stock to
account for further antidilution and price protection adjustments.  The terms of
the  Series A  Warrants,  the Series B Warrants  and the Series C  Warrants,  as
adjusted are as follows:

         We agreed to file with the Securities and Exchange Commission not later
than 30 days  after the  closing  date of the  Second  Closing,  and cause to be
effective  within  120 days after the  closing  date of the  Second  Closing,  a
registration statement in order to register the shares of common stock issued to
the  investors  and the shares  underlying  the  warrants,  including the shares
issuable  upon  exercise  of  warrants  issued to the  placement  agent.  If the
registration  statement is not filed on or before the required filing date or if
the registration  statement is not declared  effective on or before the required
effective date, then we must pay as liquidated  damages, an amount equal to 1.5%
for each 30 days or part  thereof,  and  thereafter  2% for each 30 days of part
thereof of the purchase price of the shares and warrant shares.  We must pay any
liquidated  damages in cash. The warrants  further  provide that if the required
filing and registration  dates are not met, upon written demand by a holder,  we
must pay to such holder, in lieu of delivering common stock, a sum in cash equal
to the  closing  price of our  common  stock  on the  trading  date  immediately
preceding the date notice is given by the holder,  less the exercise price,  for
each  share of common  stock  designated  in the  notice  from such  holder.  In
addition,  on one  occasion,  for a period  commencing 91 days after the closing
date of the Second Closing,  but not later than two years after the closing date
of the Second  Closing,  upon written request of the holders of more than 50% of
the shares and warrant shares actually issued upon exercise of warrants,  we are
required  to  prepare  and  file  a  registration   statement  in  the  event  a
registration statement covering the resale of such shares and warrant shares has
not been filed.  The A Warrants  expire 150 days from the date the  registration
statement is declared  effective by the Securities  and Exchange  Commission and
are  exercisable at $0.12 per share.  The B Warrants expire four years after the
date the  registration  statement is declared  effective by the  Securities  and
Exchange  Commission  and are  exercisable  at $0.15 per  share.  The C Warrants
expire  three  years  after  the date the  registration  statement  is  declared
effective by the Securities and Exchange Commission and are exercisable at $0.50
per share.

         We may call the warrants  beginning 30 trading days after the effective
date of the  registration  statement  and  ending 30  trading  days  before  the
expiration of the warrants.  A call notice may be given by us for the A Warrants
only within five trading days after the common stock has had a closing  price as
reported for the principal market of $0.24 or higher for 15 consecutive  trading
days.  A call  notice may be given by us for the B  Warrants  only  within  five
trading days after the common stock has had a closing  price as reported for the
principal  market of $0.30 or higher for 15  consecutive  trading  days.  A call
notice may be given by us for the C Warrants only within five trading days after
the common stock has had a closing price as reported for the principal market of
$1.00 or higher for 15 consecutive trading days.

         Beginning  November 4, 2004 and until the  registration  statement  has
been  effective for 150 days,  the investors must be given at least ten business
days prior  written  notice of any  proposed  sale by us of our common  stock or
other  securities or debt  obligations  except in  connection  with (a) employee
stock  options or  compensation  plans,  (b)  documented  legal fees, or (c) our
already  issued and  outstanding  shares of common stock as of the closing date.
Such proposed sales are referred to as "excepted issuances."

         Other  than  the  excepted   issuances,   if  at  any  time  until  the
registration statement has been effective for 150 days, we offer, issue or agree
to issue any common stock or  securities  convertible  into or  exercisable  for
shares of common stock (or modify any of the foregoing  which may be outstanding
at any time  prior to the  closing  date) to any person or entity at a price per
share or conversion or exercise  price per share which shall be less than $0.10,

                                       15

<PAGE>

without the consent of each  investor,  then we are required to issue,  for each
such  occasion,  additional  shares of common stock to each investor so that the
average per share  purchase price of the shares of common stock and the warrants
issued to the investor  (of only the common stock or warrant  shares still owned
by the  investor) is equal to such other lower price per share.  For purposes of
this issuance and adjustment, the issuance of any security carrying the right to
convert such security into shares of common stock will result in the issuance of
the  additional  shares of common  stock upon the  issuance of such  convertible
security,  warrant,  right or option and again upon any subsequent  issuances of
shares of common stock upon exercise of such  conversion  or purchase  rights if
such issuance is at a price lower than $0.10.

         The exercise price of the warrants is also subject to adjustment in the
event we effect a  reorganization,  consolidation or merger,  or transfer all or
substantially  all of our properties or assets.  Also, until the expiration date
of the  warrants,  if we issue any common stock other than  excepted  issuances,
prior to the complete exercise of the warrants for a consideration less than the
warrant  exercise price that would be in effect at the time of such issue,  then
the  exercise  price  shall be reduced  to such other  lower  issue  price.  For
purposes of this  adjustment,  the issuance of any  security or debt  instrument
carrying the right to convert such security or debt instrument into common stock
or of any warrant,  right or option to purchase  common stock shall result in an
adjustment  to the  exercise  price  upon the  issuance  of the  above-described
security, debt instrument, warrant, right, or option.

PLACEMENT AGENT FEE FOR THE FIRST CLOSING

         J.P.  Turner &  Company,  LLC  acted as  placement  agent for the First
Closing and for the Second Closing. For the First Closing, we agreed to pay J.P.
Turner & Company a cash fee of 8% of the aggregate  purchase price. We will also
pay J.P. Turner & Company 8% of the cash proceeds  received from the exercise of
warrants  issued in connection with the placement.  In addition,  we issued J.P.
Turner &  Company  a  warrant  to  purchase  458,306  shares  of  common  stock,
exercisable  for five years at an exercise price of $0.54 per share.  Due to the
price adjustments  caused by the Second Closing,  this warrant was cancelled and
we issued J.P. Turner & Company a warrant to purchase 1,100,000 shares of common
stock,  exercisable  for five  years at an  exercise  price of $0.12 per  share.
Further,  J.P.  Turner &  Company  will  receive:  (a) one  Placement  Agent's A
Warrant,  exercisable at $0.14 per share, for each eight A Warrants exercised by
an investor on a cash basis; (b) one Placement Agent's B Warrant, exercisable at
$0.18 per share,  for each eight B Warrants  exercised  by an investor on a cash
basis; and (c) one Placement Agent's C Warrant,  exercisable at $0.60 per share,
for  each  eight C  Warrants  exercised  by an  investor  on a cash  basis.  All
Placement  Agent's  Warrants are exercisable for five years after the respective
issue dates, are not subject to call and may be exercised on a cashless basis.

PLACEMENT AGENT FEE FOR THE SECOND CLOSING

         For the Second  Closing,  we agreed to pay J.P. Turner & Company a cash
fee of 10% of the  aggregate  purchase  price.  We will  also pay J.P.  Turner &
Company 8% of the cash proceeds received from the exercise of warrants issued in
connection  with the  placement.  In addition,  we issued J.P.  Turner & Company
warrants to purchase 504,167 shares of common stock,  exercisable for five years
at an exercise  price of $0.12 per share.  Further,  J.P.  Turner & Company will
receive:  (a) one Placement  Agent's A Warrant,  exercisable at $0.14 per share,
for each eight A Warrants  exercised  by an investor  on a cash  basis;  (b) one
Placement  Agent's B Warrant,  exercisable at $0.18 per share,  for each eight B
Warrants exercised by an investor on a cash basis; and (c) one Placement Agent's
C Warrant,  exercisable at $0.60 per share, for each eight C Warrants  exercised
by an investor on a cash basis.  All Placement  Agent's Warrants are exercisable
for five years after the respective issue dates, are not subject to call and may
be exercised on a cashless basis. We are registering in this offering a total of
11,664,212  shares issuable upon exercise of warrants issued or issuable to J.P.
Turner & Company  pursuant to the First  Closing and the Second  Closing,  which
includes a good faith  estimate of shares of common stock to account for further
antidilution and price protection adjustments.

                                       16

<PAGE>

            MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

MARKET INFORMATION

         Our common stock is currently quoted on the  Over-The-Counter  Bulletin
Board under the symbol ACUP. For the periods indicated, the following table sets
forth the high and low bid  prices  per  share of our  common  stock.  The below
prices represent  inter-dealer  quotations without retail markup,  markdown,  or
commission and may not necessarily represent actual transactions.

                                                     Fiscal 2005
                                                  ------------------
                                                   High         Low
                                                  ------------------
First Quarter Ended September 30, 2004            $1.44        $0.19
Second Quarter Ended December 31, 2004            $0.28        $0.06

                                                     Fiscal 2004
                                                  ------------------
                                                   High         Low
                                                  ------------------
First Quarter Ended September 30, 2003            $2.00        $0.81
Second Quarter Ended December 31, 2003            $1.75        $1.35
Third Quarter Ended March 31, 2004                $3.85        $1.44
Fourth Quarter ended June 30, 2004                $3.57        $0.90

                                                     Fiscal 2003
                                                  ------------------
                                                   High         Low
                                                  ------------------
First Quarter Ended September 30, 2002            $1.24        $0.85
Second Quarter Ended December 31, 2002            $1.70        $0.51
Third Quarter Ended March 31, 2003                $1.70        $0.60
Fourth Quarter Ended June 30, 2003                $1.14        $0.46

         As of January 21, 2005, there were approximately  1,948 stockholders of
record of our common stock.  Our registrar and transfer agent is Signature Stock
Transfer,  Inc., One Preston Park, 2301 Ohio Dr., Suite 100, Plano, Texas 75093;
telephone (972) 612-4120.

DIVIDEND POLICY

         We have not adopted any policy  regarding  the payment of  dividends on
our common stock. We do not intend to pay any cash dividends on our common stock
in the  foreseeable  future.  All cash  resources are expected to be invested in
developing our business.  There are no restrictions  that  materially  limit our
ability to pay cash dividends.

                                       17

<PAGE>

                             SELECTED FINANCIAL DATA

         The following  information  presents selected  financial data since the
inception of AccuPoll, Inc. in August 2001.

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------------
                                               ACCUPOLL HOLDING CORP. AND SUBSIDIARIES
                                                     CONSOLIDATED BALANCE SHEETS
-------------------------------------------------------------------------------------------------------------------------------
                                                                                                     June 30
                                                                                   --------------------------------------------
                                                                   September 30,                  (As Restated)
                                                                       2004            2004            2003            2002
                                                                    (Unaudited)
                                                                   ------------    ------------    ------------    ------------
                                ASSETS
<S>                                                                <C>             <C>             <C>             <C>
CURRENT ASSETS
           Cash                                                    $    773,961    $    113,789    $         --    $    287,159
           Accounts receivable, net                                     303,895         254,895              --              --
           Note Receivable                                              375,549              --              --         300,000
           Inventories                                                       --         168,636              --              --
           Deferred acquisition costs                                        --              --         144,206              --
           Prepaid expenses                                                  --              --           2,500         156,000
                                                                   ------------    ------------    ------------    ------------
           Total Current Assets                                       1,453,404         537,320         146,706         743,159

PROPERTY AND EQUIPMENT, net                                              14,174          14,012              --              --
CAPITALIZED SOFTWARE DEVELOPMENT COSTS, net                           1,855,532       2,544,207       1,403,899              --
OTHER ASSETS                                                             26,765          26,246              --         241,966
                                                                   ------------    ------------    ------------    ------------
           TOTAL ASSETS                                            $  3,349,875    $  3,121,785    $  1,550,605    $    985,125
                                                                   ============    ============    ============    ============

               LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
           Accounts payable and accrued expenses                   $  1,693,461    $  1,817,284    $    931,503    $    176,292
           Related party payables                                     1,214,070       1,228,070         872,940         101,020
           Deferred revenues                                             35,387          74,628              --              --
           Convertible debt                                           3,817,100       3,304,600              --              --
           Notes payable to related parties                              20,000          30,000         175,000              --
           Put liability related to warrant issuance                    163,760         163,760         113,750              --
           Liabilities subject to compromise                            732,470         732,544              --              --
                                                                   ------------    ------------    ------------    ------------
           TOTAL LIABILITIES                                          7,676,248       7,350,886       2,093,193         277,312
                                                                   ------------    ------------    ------------    ------------

EQUITY INSTRUMENTS SUBJECT TO RESCISSION (A)                          6,300,000       6,200,000       4,377,033              --
                                                                   ------------    ------------    ------------    ------------
STOCKHOLDERS' DEFICIT

           Convertible Series A preferred stock, $0.01 par value,
             80,000 shares authorized, no shares issued or
             outstanding (liquidation preference of zero)                    --              --              --              --
           Common stock, par value of $0.001, 600,000,000
             shares authorized                                          183,850         158,482         112,946         102,797
           Common subscription receivable                                    --              --              --         (12,500)
           Additional paid-in capital                                15,511,249      12,046,817       2,222,580       3,024,096
           Accumulated deficit                                      (26,321,472)    (22,634,400)     (7,255,147)     (2,406,580)
                                                                   ------------    ------------    ------------    ------------
                                                                    (10,626,373)    (10,429,101)     (4,919,621)        707,813
                                                                   ------------    ------------    ------------    ------------
           TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT             $  3,349,875    $  3,121,785    $  1,550,605    $    985,125
                                                                   ============    ============    ============    ============

           Common shares outstanding                                183,849,710     158,482,171     112,945,963     102,797,408
                                                                   ============    ============    ============    ============
</TABLE>

                                       18

<PAGE>

                     ACCUPOLL HOLDING CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>

                                         Three Months
                                           Ended                          (As Restated)
                                        September 30,      Year Ended      Year Ended      Period Ended
                                            2004         June 30, 2004    June 30, 2003    June 30, 2002
                                         (unaudited)
                                        -------------    -------------    -------------    -------------
<S>                                     <C>              <C>              <C>              <C>
NET SALES                               $     494,244    $   1,508,656    $          --    $          --
COST OF SALES                                 329,357        1,185,797               --               --
                                        -------------    -------------    -------------    -------------
GROSS PROFIT                                  164,887          322,859               --               --
EXPENSES
  General and administrative                1,315,155        3,160,257        3,104,192          904,083
  Professional fees                         2,191,277        4,264,156        1,714,475        1,198,622
  Interest                                    345,527        4,534,947           29,900          303,875
  Loss on disposal of investment                   --        1,200,000               --               --
  Impairment of goodwill (B)                       --        2,542,752               --               --
                                        -------------    -------------    -------------    -------------
                                            3,851,959       15,702,112        4,848,567        2,406,580
                                        -------------    -------------    -------------    -------------
NET LOSS                                $ (3,687,072)    $ (15,379,253)   $  (4,848,567)   $  (2,406,580)
                                        =============    =============    =============    =============
BASIC AND DILUTED LOSS
    PER COMMON SHARE                    $       (0.02)   $       (0.12)   $       (0.05)   $       (0.04)
                                        =============    =============    =============    =============
WEIGHTED AVERAGE NUMBER OF COMMON
    SHARES OUTSTANDING                    175,165,060      130,782,481      106,687,447       68,735,272
                                        =============    =============    =============    =============
</TABLE>

(A)      Includes  estimated  liability  (at  estimated  fair value)  related to
         equity  instruments  sold without  registration  and therefore,  may be
         subject to rescission.  See Note 2 to our quarterly report on Form 10-Q
         for the quarter ended September 30, 2004..

(B)      On March 31, 2004,  the  Company's  wholly owned  subsidiary  (Z prompt
         Inc.) filed for bankruptcy.  In connection with the bankruptcy  filing,
         the Company recorded an impairment  charge of approximately  $2,543,000
         to write  off the  goodwill  associated  with the  acquisition  of this
         subsidiary.  See Note 1 -  "Impairment  of Long  Lived  Assets"  to the
         annual financial statements on Form 10-K/A as of June 30, 2004.

                             DESCRIPTION OF BUSINESS

INTRODUCTION

         We develop and market computerized voting machines and their associated
products and services for use in federal, state, local and private elections. We
have  developed a direct  recording  electronic  voting  system that  provides a
voter-verified  paper audit trail that is both human and machine  readable.  Our
system was qualified as meeting certain federal voting system standards on March
25, 2004 (as fully described above in the "Risk Factors" section) and we believe
that it is currently the only electronic  voting system providing these features
that is so qualified.  Key benefits of our voting system  include:  an intuitive
touch screen interface, an audit capability that includes multiple copies of the
electronic records and a voter-verified paper audit trail that is both human and
machine  readable.  Additional  benefits include the ability to support multiple
languages,  to prevent  overvotes,  to provide under-vote  warnings,  the use of
software based on open source products (e.g.,  Linux) and open standards  (e.g.,
XML, Unicode, Java), and the use of non-proprietary hardware.

         As of September 22, 2004, our direct recording electronic voting system
was certified by the states of Alabama, Arkansas, Kentucky,  Mississippi,  Ohio,
South  Dakota,  Utah and West  Virginia.  Currently,  we are in the  process  of
applying for certification in additional states.

         Our objective is to protect citizens' right to vote by insuring access,
accuracy,  privacy and integrity in the voting process and in so doing to become
the leading  provider of polling  place  electronic  voting  solutions  that are
reliable, accurate, immediate,  confidential, secure, easy-to-use and auditable.
Our website address is www.accupoll.com.

         We are  subject to the  informational  requirements  of the  Securities
Exchange  Act of  1934,  and in  accordance  therewith  file  reports,  proxy or
information  statements and other  information  with the Securities and Exchange
Commission.  Such  reports,  proxy  statements  and  other  information  can  be
inspected  and  copied at the

                                       19

<PAGE>

public reference facilities maintained by the Commission at Judiciary Plaza, 450
Fifth  Street,  N.W.,  Washington,  D.C.  20549.  Copies of such material can be
obtained from the Public Reference Section of the Commission at Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C.20549, at prescribed rates. In addition,
the Commission maintains a web site that contains reports, proxy and information
statements and other information  regarding registrants that file electronically
with  the   Commission.   The   address   of  the   Commission's   web  site  is
http://www.sec.gov.

         We are in  the  process  of  building  a  section  of  our  website  at
www.accupoll.com  to make available our reports that we file with the Securities
and Exchange  Commission.  Until this section of our website is operational,  we
voluntarily provide paper copies of our filings free of charge upon request.

CORPORATE HISTORY

         We were  incorporated  in the State of Nevada on January  30, 1985 with
the name "Kiwi  Ventures,  Ltd." On  November  4, 1985,  we changed  our name to
"Western  International Pizza Corporation" and owned and operated 17 Godfather's
pizza  franchise  restaurants  in Arizona  until we ceased those  operations  in
approximately 1990.

         Our  current  operations  began in August  2001 with the  formation  of
AccuPoll, Inc., a Delaware corporation. On May 20, 2002, we entered into a share
exchange with AccuPoll,  Inc.  Pursuant to the exchange,  all of the outstanding
common stock and warrants of AccuPoll,  Inc. were exchanged for our shares. As a
result of the exchange,  the stockholders of AccuPoll,  Inc. acquired 75,500,000
shares of our common stock, which represented  approximately 98.7% of our issued
and  outstanding  common stock  immediately  after the  exchange.  Following the
exchange, we changed our name to "AccuPoll Holding Corp."

INDUSTRY BACKGROUND

         Elections, especially those in democratic countries, are held under the
auspices of various  government  systems.  Until the 1960's almost all elections
were   conducted   with   manually   counted   pre-printed   paper  ballots  and
lever-activated  mechanical  voting machines,  commonly known as lever machines.
Lever  machines,  which are  cumbersome to use and consist of hundreds of moving
parts,  require  significant  maintenance  and are  expensive to  warehouse  and
transport.  This method of voting and  recording of votes,  in addition to being
inefficient,  was susceptible to inaccuracies,  significant  time delays,  other
mechanical  difficulties,  and in some  instances  manipulation.  In  1964,  the
Votomatic punch card voting system was patented.  While this system has not been
actively  manufactured  since the mid 1980s,  it remains  the most  widely  used
system in North America.  In the early 1980's,  optical scan voting systems were
introduced  and began to  penetrate  the  election  equipment  market place on a
relatively  small  scale.  According  to a  study  conducted  by the  California
Institute  of  Technology  and  Massachusetts  Institute of  Technology,  market
penetration  for optical scan voting  systems  grew to slightly  over 25% of the
installed voting machine base nationwide as of July 2001.

         In recent years, the election industry began to computerize in response
to increased public acceptance and familiarity with using computers. The benefit
of computers is that they offer the opportunity to count ballots  accurately and
quickly.  Additionally,  computer  technology has created the potential for more
convenient   participation,   accessibility   for   disabled   voters   to  vote
independently  and the  elimination  of pre-printed  paper ballots.  Service and
support  have  also  become  increasingly  important  components  of the  newer,
technologically  advanced voting systems.  While the employment of technology is
becoming more generally accepted,  we believe that many voting systems currently
being marketed lag in the application of state-of-the-art computer technology.

         To our knowledge, of the voting systems on the market produced and sold
by the four largest voting system vendors  (Diebold  Election  Systems,  Sequoia
Voting Systems,  Election Systems + Software and Hart InterCivic),  only Sequoia
Voting Systems  currently  produces a direct recording  electronic voting system
with a  voter-verified  paper audit trail.  Many of our competitors  continue to
receive poor  reviews  from the  academic,  information-security  and  political
communities  for  inadequate  security,  deficient  software  coding  standards,
inadequate change management practices, and lack of a voter verified paper audit
trail.  We  believe  that  some  of  these  systems  continue  to  operate  with
non-certified software, and lack flexible functionality.

                                       20

<PAGE>

         Direct recording  electronic voting systems are computer-based  systems
first and voting appliances second. Because every computer system is susceptible
to programming  bugs and/or  possible  tampering,  we believe that  computerized
voting systems must provide for an  independent,  voter verified  record of each
voter's intent.  We believe that in order to provide a system that the voter can
have  confidence in, we must provide a voter with a  voter-verified  paper audit
trail. Our direct recording  electronic voting system provides for both a secure
electronic  recording  of the voting  process  and an  indelible  voter-verified
paper-audit  trail that  satisfies  the  federal  voting  system  standards  for
record-keeping that is maintained independently from the electronic results.

MARKET OPPORTUNITY

         The U.S.  presidential  election of November 2000 had a significant and
disruptive impact on the nation. According to a report from California Institute
of Technology  and  Massachusetts  Institute of  Technology,  approximately  1.5
million votes were lost in 2000 because of  difficulties  in either using voting
equipment or recording the results of those votes. The difficulties  experienced
with accuracy and  verifiability,  particularly  with punch card  systems,  have
generated   opportunities   for  manufacturers  of  electronic  voting  systems.
Following the 2000 election, the U.S. Congress enacted the Help America Vote Act
of 2002,  or HAVA.  HAVA was signed  into law by  President  Bush on October 29,
2002. HAVA expanded the federal government's role in elections through mandates,
standards and funding.  The U.S. Congress  authorized a total of $3.9 billion to
help states  implement  HAVA. In 2003,  $650 million was disbursed to the states
under HAVA. Of this $650 million,  half of the funds were  designated to replace
punch card and lever voting machines and the balance could be used by the states
to comply with HAVA's  requirements  and  implement  other  improvements  to the
administration  of  elections.  An  additional  $3 billion is authorized to help
states fund HAVA's  requirements for updating voting systems,  allowing disabled
voters  to vote  independently,  providing  provisional  ballots,  creating  and
maintaining  statewide  voter  registration  lists,  training poll workers,  and
educating  voters.  These  funds  are  distributed  to  states  annually  over a
three-year  period after  individual  states  certify that they have developed a
plan to use the funds to implement HAVA requirements.  States are also obligated
to  provide a five  percent  match.  Beginning  in May 2004,  the newly  created
Elections  Assistance  Commission began receiving state  certifications,  and as
each state's certification is processed,  funds will be disbursed.  Beginning on
January 1, 2006, HAVA requires that state voting systems:

         o        Permit  the voter to review the votes  selected  and change or
                  correct votes before the ballot is cast;

         o        Notify  the voter if he or she casts  more than one vote for a
                  single  office and  provide  an  opportunity  to  correct  the
                  ballot;

         o        Produce a permanent paper record with a manual audit capacity;

         o        Provide disability access,  including nonvisual access for the
                  blind and  visually  impaired,  in a manner that  provides the
                  same  opportunity  for  access  and  participation  (including
                  privacy and independence) as for other voters;

         o        Provide alternative language accessibility; and

         o        Comply with error rate standards.

         Further, each state is required to adopt uniform and non-discriminatory
standards for what constitutes a vote and how it will be counted.

         According to the National Association of Secretaries of State there are
approximately  200,000  polling  places in the  United  States,  covering  7,000
jurisdictions,  with 1.4 million  polling  place  workers  supervised  by 22,000
election officials.  According to surveys conducted by the National  Association
of  Counties  the  typical  polling  place in the  United  States  is  currently
configured to contain an average of seven voting stations.  On election day, the
100 million  voters in the United  States use over 1.4 million  voting  machines
where  approximately  60% of the voting  sites are  currently  using  antiquated
punch, lever, or paper ballot technologies. These are the same machine types for
which HAVA mandates  replacement by 2006. We are targeting  these polling places
with our touch-screen electronic direct recording electronic voting product.

                                       21

<PAGE>

OUR PRODUCTS

         The AccuPoll direct recording  electronic voting system consists of one
or more voting  stations  that offer voters an  "ATM-like"  interface,  and that
prepare and print voter verified paper records, also known as "Proof of Vote" or
"voter  verified  paper  audit  trail,"  for  machine  or  hand  counting.  Each
in-precinct  voting  station is  physically  connected  by means of a local area
network to a voting administrative workstation. The entire in-precinct system is
not  connected to any network  outside of the polling place during voting hours.
The  user-friendly  touch  screen  interface  provides  the user  easy to follow
instructions.  The system is compact, sturdy and has an estimated useful life of
at least five years.

         Once a voter  makes his or her  choices,  a Proof of Vote is printed on
paper by the voting  station.  The voter can then  examine the Proof of Vote for
accuracy  before  depositing it into a ballot box. If the Proof of Vote does not
accurately  reflect  the  voter's  intent,  that voter can then notify a polling
place  official.  The  official  will then void the  electronic  ballot  and its
corresponding Proof of Vote, and allow the voter to re-vote. Importantly,  while
the Proof of Vote is printed, the voter's electronic ballot is stored locally on
the voting  station and is also  immediately  transmitted  to the polling  place
voting administrative workstation. Thus, when the polling place closes, multiple
redundant  copies of the  electronic  ballots are  available  in addition to the
paper Proofs of Vote. At no time is the voter's identity  associated with either
the electronic  ballot or the paper Proof of Vote.  Accordingly,  each ballot is
securely  stored  in  multiple  locations  and in  forms  that  can  be  readily
cross-audited against each of the other ballot representations.

         We have based our system  software on open  standards  (JAVA  language,
Unicode,  and XML for the ballot and behavior  specifications).  As a result, we
have eliminated the need to deploy  proprietary  technologies that are expensive
to acquire and maintain and which we believe often lack the flexibility to adapt
quickly to meet changing voting system standards.  Our solutions are scalable in
the software and hardware design.  Our hardware  components are "off the shelf",
and replacement parts, such as printers, are readily available, thereby reducing
maintenance costs and unit downtime.

         We  have  designed  our  product  with  both  the  voter  and  election
administrator in mind. To our knowledge,  we have created the only voting system
that has been  qualified as meeting  federal  voting  system  standards and that
offers a  voter-verified  paper  audit  trail  that is both  human  and  machine
readable,  and is readily  accessible and easily  employable by disabled voters.
Examples of our system's  disability  accommodating  functions include a special
tactile keypad to facilitate  ease of navigation for the blind,  Braille text on
the keypad,  audio ballot support in the voter's selected language,  recognition
of  non-human   touch  from  users  with   prosthetic   limbs,   and  wheelchair
accessibility.  The touch screen function is user-friendly and has been designed
to minimize potential errors. Other notable features include the ability to:

         o        support multiple  languages,  both on-screen and in audio (all
                  languages supported by Java/Unicode);

         o        alter visual schemes to better enable those with modest visual
                  impairments, such as color blindness or tunnel vision;

         o        notify  electronically  the voting  administrator of equipment
                  malfunction(s);

         o        spoil an erroneous ballot before the voter deposits his or her
                  Proof of Vote into the ballot box; the ability to provide full
                  support for provisional ballots as required by HAVA; and

         o        record write-in candidates.

         Elections   officials  also  enjoy  benefits  from  our  system  as  it
eliminates  the  need  for  costly  pre-printed  paper  ballots.   The  election
tabulation and reporting  functions greatly enhance the reliability and accuracy
of the voting process. Furthermore, the non-proprietary hardware ensures greater
inter-operability and ease of repairs or upgrades.

         We have  entered  into a contract  for the  manufacture  of our current
product which is comprised of a printer, touch screen, computer processing unit,
smart card reader,  integrated case, power supply and related control  software.
The  contract  requires  us  to  acquire  the  product   exclusively  from  this
manufacturer  unless the  manufacturer  is unable to produce and deliver on time
our required quantity. We believe that other manufacturers would be available to
manufacture  the  product  should  this  manufacturer  become  unavailable.  The
manufacturer  may change prices upon 60 days prior written  notice to us. Unless
sooner  terminated,  the agreement expires in December 2006. As of September 22,
2004, the manufacturer and its president own 766,000 shares of our common stock.
For a

                                       22

<PAGE>

discussion of risks with respect to this arrangement, please see "Risk Factors -
Risks Relating to Our Business - We rely on a third-party manufacturer."

BUSINESS STRENGTHS

         Our key business strengths are described below:

         OUR  PRODUCT  IS A  FEDERALLY  QUALIFIED  VOTING  SYSTEM  WITH A  VOTER
VERIFIED PAPER AUDIT TRAIL THAT IS BOTH HUMAN AND MACHINE READABLE. On March 25,
2004, the AccuPoll  voting system was qualified as being compliant with the 1990
federal  voting  system  standards as to hardware,  and the 2002 federal  voting
system  standards as to software.  We believe that our  technology  is currently
unmatched  in its  capability  to  simultaneously  produce  multiple  copies  of
electronic  ballots  (recorded on both the polling  place voting  administrative
workstation and the local voting  station),  as well as generate an independent,
voter-verified  paper audit  trail,  which is  completely  auditable  and can be
optically  scanned.  We  believe  the  ability  of our system to provide a fully
auditable  paper record of the election is critical,  as HAVA  requires that any
voting system purchased with federal funds produce a permanent paper record with
a manual audit  capacity  that will be  available as an official  record for any
recount. We have submitted an updated version of our direct recording electronic
voting system to the Independent Test Authorities for full qualification testing
under the 2002  federal  voting  system  standards.  We expect to complete  full
qualification  testing under the 2002 federal voting  standards during the first
calendar quarter of 2005.

         WE ARE WELL POSITIONED TO TAKE ADVANTAGE OF THE CURRENT MARKETPLACE AND
ENVIRONMENT   OF  ELECTION   REFORM.   We  believe  that  we  have   designed  a
technologically  advanced  electronic  voting  product  that  meets the  current
federal  voting  system  standards  and the  requirements  of  HAVA,  as well as
addresses current voting systems'  technology  deficiencies.  We believe that we
are first to market in terms of  designing a voting  system that  complies  with
both the requirements of HAVA and the federal voting system standards. Achieving
voting  system  standards  compliance  can be a  lengthy  and  arduous  process,
typically taking twelve or more months, thereby posing a significant barrier for
competitors. In addition to being qualified under the federal standards, we have
spent the past two years  marketing our product to our target  customer base and
thus we believe we are well positioned to begin generating sales once the states
begin disbursing their federal funds and we have received the appropriate  state
certifications.  With the recent availability of $2.35 billion to the states, we
believe that a number of significant  purchasing decisions will be made prior to
the end of 2005.  As of June 17, 2004,  approximately  half of the federal funds
have been  distributed  to the states.  The  remaining  funds are expected to be
distributed once the states complete the necessary  requirements.  However,  the
portion of funds used by a state for  acquisition  of new  voting  systems  will
depend upon each state's plan and we cannot assure you that states will use this
funding to purchase  our product or that states will make  purchasing  decisions
this year.

         WE HAVE RELATIONSHIPS WITH WELL-KNOWN AND ESTABLISHED PARTNERS. We have
entered into teaming and reseller agreements with various established  companies
that offer  election-related  services. We have entered into a teaming agreement
with Alternative Resources Corporation whereby Alternative Resources Corporation
will provide deployment and support services for our direct recording electronic
voting  system.  In  addition,  we  have  entered  into a  multi-state  reseller
agreement  with AmCad,  LLC whereby  AmCad will  assist with the  marketing  and
deployment of our direct recording electronic voting system. We are currently in
negotiations with additional  well-known,  large and well capitalized  marketing
partners in other  targeted  states.  However,  we cannot assure you that any of
these  negotiations  will  lead to a  definitive  business  relationship  in the
future.

         OUR  EXPERIENCED  MANAGEMENT  TEAM HAS DEEP  KNOWLEDGE  OF  INFORMATION
TECHNOLOGY. Our senior management collectively has 80 years of experience in the
information  technology  industry  in  coding  and  development  marketing.  Our
management  team has held senior  positions  at leading  information  technology
firms,  such as MCI Systemhouse and EDS, and has considerable  experience in the
process of large-scale systems deployment.

BUSINESS STRATEGY

         We plan to  leverage  our  business  strengths  in  order  to grow  our
operations. The key elements to our business strategy are described below:

                                       23

<PAGE>

         LEVERAGE THE MARKETING STRENGTH AND INFRASTRUCTURE OF OUR PARTNERS.  We
believe that the  relationships  that we are  building  with our  marketing  and
reselling  partners  will help to  position us in critical  larger  markets.  We
believe that we will gain enhanced  credibility  through  associating with these
partners.  Additionally,  we believe that we have the ability to leverage  their
resources  and  networks  and in turn be better  positioned  to sell and  deploy
programs  into  these  larger  target  markets.  Our  partners  are well  known,
established companies that have considerable  experience in providing technology
solutions  and service  support in the  election  process.  We will  continue to
maintain,  and intend to expand,  our strategic  alliances  with these and other
established partners in the election services business. Currently we have chosen
to develop partnering relationships on a state-by-state basis.

         EXPAND  OUR  TARGETED,  INDEPENDENT  MARKETING  STRATEGY  TO SMALL- AND
MID-SIZED  CUSTOMERS.  We have begun a direct marketing approach to reach small-
and mid-sized target markets. We initiated this marketing program by identifying
specific  regions  and  developing  a  presence  by  attending  trade  shows and
conferences,  which provides us with  opportunities to meet, as well as educate,
our  customers.  We also  market  our  system by means of our  website  and have
prepared a web-based  virtual voting experience to further enhance the awareness
and  understanding  of our product.  We are  building  awareness of the AccuPoll
product so as to be well  positioned  in our target  markets as HAVA  funding is
disbursed to the states.  We are working to obtain all  appropriate  federal and
local certification with that timing in mind. We intend to grow our direct sales
and marketing force,  engage additional  lobbyists in our target states,  engage
local  sales/marketing  agents,  and build a robust  sales  support and delivery
organization that will reinforce our sales and marketing activities.

         MAINTAIN  PRODUCT  LEADERSHIP.  As the  developer  of the first  voting
system  with a  voter-verified  paper  audit  trail  that  is  both  human-  and
machine-readable and that is also qualified as compliant with the federal voting
system  standards,  we believe  that our product has the  potential  to become a
leader in the voting system market.  We are firmly committed to ongoing research
and development and  standardized  product testing to insure that our electronic
voting  system  continues  to be a leading  platform in the  market.  We plan to
design and test new  generations  of our  product  with the intent of  enhancing
functionality in anticipation of additional  government  requirements and market
demands (e.g., instant runoff voting).

         SELECTIVELY EXPAND INTO RELATED PRODUCT OFFERINGS. When appropriate, we
intend to  acquire  selectively  related  businesses  that  complement  our core
product  line and expand the range of  services  that we can offer our  customer
base.  As we find  opportunities  that broaden our  offerings,  we will consider
making  additional  acquisitions.  We believe it is important to complement  our
revenue  stream by  expanding  into related  products and services  where we can
leverage our knowledge and capabilities in electronic voting systems.

         EXPAND ADDRESSABLE  MARKETS VIA ENTRY INTO FOREIGN VENUES. The standard
election process is universal by nature, and as part of its core technology, the
AccuPoll direct recording  electronic voting system was designed and implemented
as a  flexible  platform  that  can be  adapted  to meet the  needs  of  various
countries.  We plan to expand our international sales effort in Europe,  Canada,
Asia/Pacific and Latin America.

REGULATORY MATTERS

         We expect that our voting systems will be sold primarily to counties in
the United States and other  governmental  jurisdictions.  In the United States,
our ability to sell our voting system products  depends on the  qualification of
each product through  independent testing for compliance with the federal voting
system standards.  In addition,  most states require  state-level  certification
before  we may  sell  our  products  to local  jurisdictions  in  those  states.
Moreover,  local  jurisdictions may require vendor  qualification and acceptance
level testing.  Because we plan to sell our products to government agencies,  we
will  be  subject  to  laws,   regulations  and  other  procedures  that  govern
procurement and contract implementation by those agencies.

         As of September 22, 2004, our direct recording electronic voting system
was certified by the states of Alabama, Arkansas, Kentucky,  Mississippi,  Ohio,
South  Dakota,  Utah and West  Virginia.  Currently,  we are in the  process  of
applying for certification in additional states.

         Obtaining the necessary qualifications and certifications and complying
with  government  procurement  requirements  can  be  time  consuming,   involve
unexpected  delays and may be costly.  We are subject to a number of significant
risks and  uncertainties  associated with government  regulation and procurement
that could  materially and

                                       24

<PAGE>

adversely   affect  our  business.   For  a  description   of  these  risks  and
uncertainties, please see "Risk Factors - Risks Relating to Regulation."

ENVIRONMENTAL PROTECTION

         Our compliance with federal, state and local laws or regulations,  that
govern the discharge of materials  into the  environment  has not had a material
adverse effect upon our capital  expenditures,  earnings or competitive position
within our markets.

COMPETITION

         The  market  for the  manufacture  and  supply of  computerized  voting
machines is highly competitive. We anticipate that competition will intensify in
the  future.  As of January  21,  2005,  we  believe  that our  competitors,  in
alphabetical order, included:

COMPANY NAME                                          PRODUCT NAME
------------                                          ------------
Advanced   Voting   Solutions,   Inc.,  a             WINvote
private company based in Frisco, Texas

Avante International Technology,  Inc., a             VOTE-TRAKKER
private  company based in Princeton,  New
Jersey

Diebold Elections  Systems,  Inc., (DESI)             AccuVote-TS
a subsidiary of Diebold,  Inc.  based in
McKinney, Texas

Election Systems + Software  (ES+S), a                IVotronic
private company based in Omaha, Nebraska

Guardian Voting Systems,  a subsidiary of             ELECTronic 1242
Danaher   Controls   based   in   Gurnee,
Illinois

Hart InterCivic,  a private company based             eSlate
in Austin, Texas

Sequoia Voting  Systems,  a subsidiary of             AVC Edge
De  La  Rue,   plc,   based  in  Oakland,
California

Unilect  Corporation,  a private  company             Patriot
based in Dublin, California

         We believe that the  following are the primary  competitive  factors in
our market:

o        accessibility;

o        auditability;

o        brand recognition and market penetration;

o        customer support and service;

o        ease of use;

o        government qualification and certification of products;

o        price;

o        reliability of services; and

o        security.

                                       25

<PAGE>

         We believe that we compete  favorably  with  respect to these  factors.
However,  many of our competitors have significantly greater market penetration,
brand-name  recognition,  engineering and marketing  capabilities and financial,
technological and personnel  resources than we do. As a result, they may be able
to develop and expand their  customer base more  quickly,  adapt more swiftly to
new or  emerging  technologies  and  changes in  customers'  requirements,  take
advantage of acquisitions  and other business  opportunities  more readily,  and
devote greater  resources to the marketing and sale of services than we can. Our
competitor's  products may offer different features than our products that might
make their products more attractive to some voting administrators. To the extent
that  we do not  compete  successfully  with  respect  to  any  of  the  primary
competitive factors in our market, our business may be materially harmed.

RESEARCH AND DEVELOPMENT

         We  expect  that the pace of  technological  advances  in the  computer
voting  machine  industry  will  rapidly   increase.   Our  ability  to  compete
successfully  is heavily  dependent  upon our ability to ensure a continuing and
timely flow of  competitive  products and  technology  to the  marketplace.  Our
internal  product  development  efforts are focused on designing and  developing
computerized  voting machines that adhere to industry  standards and incorporate
the technologies and features that we believe are most desired by our customers.

         We believe that continued  strategic  investment in product development
is  essential  for us to become  competitive  in the  markets we serve.  Without
significant  additional financing,  we will be unable to continue development of
our products.

INTELLECTUAL PROPERTY

         We  rely  upon  trade  secrets,   technical   know-how  and  continuing
technological  innovation to develop and maintain our competitive position.  The
products  that we  design  require  a large  amount of  engineering  design  and
manufacturing  expertise.  The  majority  of these  technological  capabilities,
however,  are not protected by patents or licenses.  We rely on the expertise of
our  employees and our learned  experiences  in both design and  manufacture  of
these products.  We have taken steps to protect both our  intellectual  property
and brand name in the  marketplace.  We have applied to the United States Patent
and  Trademark  Office  for a systems  and  method  patent  with  respect to our
electronic  voting  system  that  produces an official  voter  verifiable  paper
ballot. We have also filed trademark  applications with the United States Patent
and Trademark Office to protect the Accupoll brand name and logo. We are subject
to  a  number  of  significant  risks  and  uncertainties  associated  with  our
intellectual  property that could  materially and adversely affect our business.
For a description of these risks and  uncertainties,  please see "Risk Factors -
Risks Relating to our Technology."

OUR EMPLOYEES AND CONSULTANTS

         As of January 21, 2005,  we had 13 and eight,  respectively,  full-time
employees and  consultants.  Our employees are not  represented  by a collective
bargaining organization. We believe our relationship with our employees is good.

                             DESCRIPTION OF PROPERTY

         We occupy  approximately  10,000 square feet of office space located at
15101 Red Hill Ave.  Suite # 220,  Tustin,  California.  The monthly cost of the
lease is $1.10 per square foot. Our lease expires on July 31, 2006.

                                LEGAL PROCEEDINGS

         In September  2003,  we were served with a lawsuit filed in the Supreme
Court of New York, County of New York, by Stern & Co  Communications  LLC, d/b/a
Stern + Co. Stern  alleging  that we breached a contract with them by failing to
tender payment in full for services rendered. Stern sought to recover damages in
the amount of  $35,000,  and a warrant to purchase  36,000  shares of our common
stock. In November 2003, we entered into a stipulated  settlement agreement with
Stern. In  consideration  for a full release of Stern's claims,  we issued Stern
15,000 shares of common stock and granted a warrant to purchase 15,000 shares of
common stock at an exercise  price equal to our closing  stock price on the date
of issuance.

                                       26

<PAGE>

         In October  2003,  Paul Musco,  the  ex-President  of our wholly  owned
subsidiary,  Z prompt, Inc. filed suit against us and Z prompt in Superior Court
of  California,  County  of  Orange,  California.  The claim  alleged  breach of
contract, fraud and misrepresentation  stemming from our acquisition of, and his
termination of his employment  with, Z prompt.  Mr. Musco is seeking  damages in
excess of $800,000,  plus punitive  damages.  We believe that Mr. Musco breached
his agreements  with Z prompt and we have filed a cross  complaint for breach of
contract, fraud, negligence and breach of fiduciary duty seeking $2,000,000. Mr.
Musco has since filed his own cross-complaint  against us, Dennis Vadura,  Frank
Wiebe and Craig Hewitt alleging fraud and tortious  interference  with contract.
Paul Musco has also  modified his  complaint to include  additional  damages for
alleged  losses  resulting  from his  inability  to sell his shares of  AccuPoll
Holding Corp. In addition,  Michael Shockett, a former employee,  has joined the
suit and filed a cross  complaint  against us, Z prompt,  Dennis  Vadura,  Frank
Wiebe and Craig Hewitt alleging fraud,  tortuous  interference with contract and
wrongful termination. Michael Shockett was terminated from employment with us in
April 2004 for cause.  On or about  January 25, 2005, we settled this dispute in
consideration  for our agreement to: (i) make total payments of $625,000 cash to
Mr. Musco and Mr. Shockett; and (ii) issue 1.5 million shares of common stock to
Mr. Musco and Mr.  Shockett.  In the event of default on the cash payment terms,
there will be an additional $250,000 cash amount added to the settlement amount.

         In October 2003, a former  employee of Z prompt,  Nathalie  Luu,  filed
suit against Z prompt and us in Superior Court of California,  County of Orange,
California. The complaint claims wrongful termination, intentional infliction of
emotional  distress and  retaliatory  discharge,  based on allegations  that the
plaintiff  was  terminated  for  reporting  to  management   alleged  fraudulent
accounting  practices  by Z prompt  management.  The former  employee is seeking
$112,000 in monetary damages including loss of wages, plus punitive damages. The
case is currently in discovery.

         On March 23, 2004, our wholly-owned subsidiary, Z prompt, Inc., filed a
petition for relief under Chapter 11 of the United States Bankruptcy Code in the
United States Bankruptcy Court, Central District of California.  As of September
30,  2004,  Z  prompt  had not  filed a  proposed  Plan of  Reorganization.  The
bankruptcy was dismissed on January 25, 2005 pursuant to a stipulation between Z
prompt, Inc. and the bankruptcy trustee.

                       SUPPLEMENTARY FINANCIAL INFORMATION

Selected  quarterly  financial  data  for each of the  quarters  in the two most
recent fiscal years are presented below:

<TABLE>
<CAPTION>

                                                               QUARTER ENDED
                                            ------------------------------------------------------
                                            9/30/03        12/31/03        03/31/04       06/30/04
                                        -------------   -------------   -------------   -------------
<S>                                    <C>             <C>             <C>              <C>

Net Sales                               $          --   $     361,232   $     620,140   $     527,284
Gross Profit                                       --         218,729          15,568          86,562
Net Loss                                   (1,612,650)     (3,593,022)     (4,282,293)     (5,891,248)
Loss per common share                           (0.02)          (0.03)          (0.03)          (0.04)

</TABLE>
<TABLE>
<CAPTION>



                                                               QUARTER ENDED
                                        -------------------------------------------------------------
                                            9/30/02        12/31/02        03/31/03       06/30/03
                                        -------------   -------------   -------------   -------------
<S>                                    <C>             <C>              <C>            <C>

Net Sales                               $          --   $          --   $          --   $          --
Gross Profit                                       --              --              --              --
Net Loss                                     (576,324)     (1,528,888)       (999,412)     (2,743,943)
Loss per common share                           (0.01)          (0.01)          (0.01)          (0.02)
</TABLE>


                                       27
<PAGE>

In June  2003,  the  Company  recorded  an  adjustment  to  capitalize  software
development  costs of  approximately  $436,000 that were previously  expensed in
earlier  fiscal 2003  quarters  relating to WTI.  The  allocation  of such costs
incurred from a related party was adjusted in the fourth quarter of fiscal 2003.
The effect of this  adjustment  on the first  three  quarters  of fiscal 2003 is
summarized below:

<TABLE>
<CAPTION>

                                                        QUARTER ENDED
                                        ---------------------------------------------
                                            9/30/02        12/31/02        03/31/03
                                        -------------   -------------   -------------
<S>                                     <C>             <C>            <C>

Net loss, as previously described       $    (738,639)  $  (1,683,613)  $  (1,115,187)
Adjustment described above                    162,915         157,725         115,775
                                        -------------   -------------   -------------
Net loss, as restated                   $     576,324   $  (1,528,888)  $    (999,412)
                                        =============   =============   =============
</TABLE>


Such  adjustments had no effect on the  basic/diluted  loss per common share for
any of the first three quarters of fiscal 2003.  See Company's  annual report on
Form  10-K/A  for the year  ended  June 30,  2004,  included  elsewhere  in this
registration statement, for more information.



                                       28

<PAGE>

                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

GENERAL

         We are in the business of developing and marketing  computerized voting
machines and their associated  products and services for use in federal,  state,
local and private  elections.  We have developed a direct  recording  electronic
voting  system  that  provides a  voter-verified  paper audit trail that is both
human and machine readable.  Our system was qualified as meeting certain federal
voting  system  standards  on March 25, 2004 and we believe that it is currently
the only electronic voting system providing these features that is so qualified.
As of September  22, 2004,  our direct  recording  electronic  voting system was
certified by the states of Alabama, Arkansas, Kentucky, Mississippi, Ohio, South
Dakota, Utah and West Virginia. Currently, we are in the process of applying for
certification in additional states.

         For the fiscal  years ended June 30, 2004,  2003 and 2002,  we incurred
losses of $15,379,253,  $4,848,567 and $2,406,580,  respectively. As of June 30,
2004 we had an accumulated deficit of $22,634,400.

RESULTS OF OPERATIONS

COMPARISON  OF THREE  MONTHS  ENDED  SEPTEMBER  30, 2004 TO THREE  MONTHS  ENDED
SEPTEMBER 2003

         REVENUES:  Net Sales for the  quarter  ending  September  30, 2004 were
$494,244 as compared to net sales for the three months ending September 30, 2003
of $0. The  increase in net sales is solely due to the  acquisition  of Zprompt,
Inc. which was consolidated beginning November 2003.

         COST OF GOODS SOLD: Cost of goods sold for the quarter ending September
30, 2004 were $329,357,  as compared to $0 for the quarter ending  September 30,
2003.  The  increase in net sales is solely due to the  acquisition  of Zprompt,
Inc. which was consolidated beginning November 2003.

         GENERAL  AND  ADMINISTRATIVE   EXPENSES:   General  and  Administrative
expenses for the quarter ended September 30, 2004 were $1,315,155 as compared to
$915,290 for the quarter  ended  September  30,  2003,  and increase of 44%. The
increase is a result of fees  associated with our September  private  placement,
and increased salary expenses resulting from the acquisition of Zprompt Inc.

         PROFESSIONAL  FEES:  Professional  Fees for the quarter ended September
30, 2004 were  $2,191,277 as compared to $87,327 for the quarter ended September
30, 2003, an increase of 2,400%. The increase is a result of charges of expenses
associated with various warrants, which were granted to consultants.

         INTEREST EXPENSE: Interest Expenses for the quarter ended September 30,
2004 were $345,527 as compared to $610,073 for the quarter  ended  September 30,
2003, a decrease of 77%. The decrease is a result of less  expenses  incurred in
this  quarter,  compared  to  the  prior  year  period,  related  to  beneficial
conversion features of equity instruments issued at below market.

         NET  LOSS:  Net loss  for the  quarter  ended  September  30,  2004 was
$3,687,072 as compared to $1,612,690 for the quarter ended September 30, 2003, a
129% increase. The increase is primarily due to non-cash professional fees.


COMPARISON OF YEAR ENDED JUNE 30, 2004 TO YEAR ENDED JUNE 30, 2003

         REVENUES:  For  the  year  ended  June  30,  2004  we had  revenues  of
approximately $1.5 million.  For the year ended June 30, 2003 we had no revenue.
The increase was caused by our  acquisition of Z prompt,  which was recorded for
accounting purposes in November 2003.

         GENERAL  AND  ADMINISTRATIVE   EXPENSES:   General  and  administrative
expenses  were  $3,160,257  for the year  ended  June 30,  2004 as  compared  to
$3,104,192  for the year ended  June 30,  2003.  The  increase  in  general  and

                                       29

<PAGE>

administrative expenses is the result of additional staff.

         PROFESSIONAL FEES: Professional fees were $4,264,156 for the year ended
June 30, 2004 as compared to  $1,714,475  for the year ended June 30, 2003.  The
increase in professional  fees is due to costs of services to develop the Ballot
Buddy  product  and  non-cash  expenses  related to the  issuance of warrants to
consultants.

         INTEREST  EXPENSE:  Interest  expense was $4,534,947 for the year ended
June 30,  2004 as  compared  to $29,900  for the year ended June 30,  2003.  The
increase in interest expense is due to non-cash  beneficial  conversion  charges
for equity instruments tied to fund raising.

         NET LOSS:  For the year ended June 30, 2004,  we incurred a net loss of
$15,379,253 and a loss per common share of $0.12. This compares to a net loss of
$4,848,567  and a loss per  common  share of $0.05 for the year  ended  June 30,
2003.  The  increased  loss is due to increased  professional  fees and interest
expense plus the  impairment of goodwill  totaling  $2,542,752 and a loss on the
disposal  of an  investment  totaling  $1,200,000,  as  well  as the  additional
expenses of our newly acquired subsidiary.

COMPARISON OF YEAR ENDED JUNE 30, 2003 TO YEAR ENDED JUNE 30, 2002

         REVENUES: For the years ended June 30, 2003 and 2002 we had no
revenues.

         GENERAL  AND  ADMINISTRATIVE   EXPENSES:   General  and  administrative
expenses  increased by approximately  243% to $3,104,192 for the year ended June
30, 2003 from  $904,083  for the period  ended June 30,  2002.  The  increase in
general and  administrative  expenses  is the result of  additional  staff,  and
non-cash  expenses  related to the issuance of options and warrants to employees
and consultants that are in the money.

         PROFESSIONAL FEES: Professional fees were $1,714,475 for the year ended
June 30, 2003 as compared to  $1,198,622  for the year ended June 30, 2002.  The
increase in  professional  fees by  approximately  43% was due to  increases  in
development  fees of ballot buddy  product and  increased  legal and  accounting
expenses.

         INTEREST EXPENSE:  Interest expense was $29,900 for the year ended June
30,  2003 as  compared  to  $303,875  for the  year  ended  June 30,  2002.  The
significant  decrease  in  interest  expense  was  due  to  non-cash  beneficial
conversion of investments.

         RESEARCH AND DEVELOPMENT:  Research and development expenses was $0 for
the year ended June 30, 2003 as compared to $176,064 for the year ended June 30,
2002.

         NET LOSS:  For the year ended June 30, 2003,  we incurred a net loss of
$4,848,567  and a net loss per share of $0.05.  This  compares  to a net loss of
$2,406,580 and a net loss per share of $0.04 for the year ended June 30, 2002.

LIQUIDITY AND CAPITAL RESOURCES

         From August 2001,  the date of our  inception,  through  September  30,
2004,  we have raised a total of  approximately  $19.3  million from the sale of
common stock and convertible notes and other securities.

         As of September 30, 2004 we had cash of $773,961 and a working  capital
deficiency  of  approximately  $6.2  million.  Our  accumulated  deficit  as  of
September 30, 2004 was approximately $26.3 million.

         In  November  2003,  we secured a $5 million  dollar  revolving  credit
facility,  in the form of two  seven-month  convertible  notes.  The notes  bear
interest at an annual rate of 10% and  originally  matured on June 30, 2004, but
have been extended to December 31, 2004.  The notes are  convertible  on 90 days
written  notice by the  holders  at the lesser of (i) 50% of the  average  three
lowest  closing  prices for our common  stock for the  twenty  days  immediately
preceding the conversion  date or (ii) $.0625 per share.  At September 30, 2004,
we had borrowed $2,380,000 under such notes.

         We have a convertible  debenture with Palisades  Holdings,  LLC whereby
Palisades Holdings, at its

                                       30

<PAGE>

discretion,  may provide us loans of up to $1,250,000. The convertible debenture
bears interest at an annual rate of 10% and originally matured on June 30, 2004,
but has been extended to December 31, 2004.  The debenture is  convertible on 90
days  written  notice  by  Palisades  Holdings  at the  lesser of (i) 50% of the
average  three  lowest  closing  prices for our common stock for the twenty days
immediately preceding the conversion date or (ii) $.0625 per share. At September
30, 2004, we had borrowed $836,000 under such debenture.

         We have a convertible  debenture  with C&S  Consolidated  Services Hong
Kong.  The  convertible  debenture  bears  interest  at an annual rate of 7% and
matured on October 14, 2004. The debenture is convertible in to shares of common
stock of $0.35 per share.  At  September  30,  2004,  we had balance of $288,600
under such debenture.

         We have a convertible  debenture with four  accredited  investors.  The
convertible  debenture  accrued  interest at an annual rate of 8% and matured on
July 2, 2004. In October 2004, the debenture was converted into 3,125,000 shares
of common stock of $.15 per share.

         On September  13, 2004,  we completed a private  placement  transaction
with eleven  accredited  investors,  pursuant to which we sold an  aggregate  of
3,666,447 shares of common stock, 1,833,227 Series A Warrants,  1,833,227 Series
B  Warrants  and  1,833,227  Series  C  Warrants.  We  received  gross  proceeds
approximating  $1,650,000.  For each two  shares  of  common  stock,  we  issued
investors  one A Warrant,  one B Warrant and one C Warrant.  Each two shares and
three  warrants were sold at a total price of $0.90.  The private  placement was
exempt from registration under Rule 506 of Regulation D of the Securities Act of
1933, as amended.

         On November 4, 2004, we completed a private placement  transaction with
eleven accredited investors, pursuant to which we sold an aggregate of 6,050,000
shares of common stock, 3,025,000 Series A Warrants, 3,025,000 Series B Warrants
and 3,025,000 Series C Warrants.  We received gross proceeds totaling  $605,000.
For each two shares of common stock,  we issued  investors one A Warrant,  one B
Warrant  and one C Warrant.  Each two shares and three  warrants  were sold at a
total  price of $0.20.  The  private  placement  was  exempt  from  registration
requirements under Rule 506 of Regulation D of the Securities Act of 1933.

         We have offered and sold a substantial number of shares of common stock
and warrants and options to purchase common stock without registration under the
Securities  Act of 1933, as amended,  or  qualification  under state  securities
laws.  If any offer or sale were not exempt from,  or otherwise  not subject to,
federal and state  registration and  qualification  requirements,  the purchaser
would have a number of remedies,  including  the right to rescind the  purchase.
The Securities  Act of 1933, as amended,  requires that any claim for rescission
be brought within one year of the alleged violation.  We have sold approximately
9,768,000  shares of common stock and  warrants  and options to purchase  common
stock in the United  States  within one year of  September  30,  2004.  The time
periods  within  which  claims  for  rescission  must  be  brought  under  state
securities  laws vary and may be two years or more from the date of the  alleged
violation.  We have sold  approximately  13,995,000  shares of common  stock and
warrants  and options to purchase  shares of common  stock in the United  States
within two years of  September  30,  2004.  Further,  we cannot  assure you that
courts will not apply  equitable or other  doctrines to extend the period within
which  purchasers  may bring their  claims.  The number of warrants  and options
described  above does not  include  warrants  and options to purchase a total of
3,600,000  shares of common stock issued  within two years of September 30, 2004
to our chief executive officer, Dennis Vadura and our president,  Frank Wiebe or
a warrant to purchase 12,400,000 shares of common stock for which the holder has
agreed in writing  that it will not assert any right to  rescission  that it may
have. However, we cannot assure you that this agreement is enforceable.

CAPITAL EXPENDITURES

         We anticipate  certain capital  expenditures  related to developing and
testing  subsequent  versions of the voting  system  hardware and  software.  We
estimate such capital expenditures for hardware to be approximately $250,000 and
an  additional  $250,000 for software  over the course of the fiscal year ending
June 30,  2005.  We will be reliant on future  fund  raising in order to pay for
development and testing of these subsequent versions.

GOING CONCERN

         We have incurred losses from operations since  inception,  had negative
working  capital of  approximately  $6.2 million at September 30, 2004, and lack
operational  history.  These conditions,  among others,  raise substantial

                                       31

<PAGE>

doubt about our ability to continue as a going concern.

         We have not generated  any revenues from our Voting System  operations,
and there is no assurance of any future  revenues.  We will require  substantial
additional  funding  for  continuing  the  development,   obtaining   regulatory
approval,  and  commercialization of our product.  There is no assurance that we
will be able to obtain  sufficient  additional  funds  when  needed or that such
funds, if available, will be obtainable on satisfactory terms.

         Management has taken actions to address these matters, which include:

         o        Retention of experienced  management personnel with particular
                  skills in the commercialization of such products;

         o        Attainment   of   technology  to  develop  such  products  and
                  additional products; and

         o        Raising  additional  funds  through  the  sale of debt  and/or
                  equity securities.

         Federal,  State and various foreign  government  regulations govern the
sale of our  products.  There  can be no  assurance  that we  will  receive  the
regulatory approval required to market our proposed products.

         The accompanying  consolidated  financial statements have been prepared
assuming  that we will continue as a going  concern  which  contemplates,  among
other things,  the realization of assets and  satisfaction of liabilities in the
ordinary  course of business.  As stated above,  we have incurred losses through
September 30, 2004,  have negative  working capital at that date and have a lack
of operational history which, among other factors, raise substantial doubt about
our ability to continue as a going concern. We intend to fund operations through
sales of the Voting  System,  but there is no commitment by any entities for the
purchase of any of the proposed  products.  In the absence of significant  sales
and profits,  we may seek to raise  additional funds to meet our working capital
requirements  through  debt and/or  equity  financing  arrangements.  Management
believes  that  such  arrangements  will  be  sufficient  to  fund  our  capital
expenditures,  working  capital needs and other cash  requirements  for the year
ending June 30, 2005.  The  successful  outcome of future  activities  cannot be
determined at this time,  and there is no assurance  that, if achieved,  we will
have sufficient funds to execute our intended business plan or generate positive
operating results.

         These  circumstances,  combined with the potential liability associated
with  certain  equity  instruments  subject  to  rescission  (see  Note 2 to the
accompanying  interim financial  statements for additional  information),  raise
substantial  doubt  about  our  ability  to  continue  as a going  concern.  The
accompanying  consolidated  financial  statements do not include any adjustments
that might result from the outcome of this uncertainty.

INFLATION

         Our management believes that inflation has not had a material effect on
our results of operations.

OFF-BALANCE SHEET ARRANGEMENTS

         We do not have any off balance sheet  arrangements  that are reasonably
likely to have a current or future effect on our financial condition,  revenues,
results of operations, liquidity or capital expenditures.

                                       32

<PAGE>

CONTRACTUAL OBLIGATIONS

         As of September 30, 2004, we had the following contractual obligations:

<TABLE>
<CAPTION>
                                                              Payments due by period
                                            -----------------------------------------------------------
                                                      Less than                             More than 5
Contractual Obligations                     TOTAL       1 YEAR     1-3 YEARS    3-5 YEARS      YEARS
-------------------------------------------------------------------------------------------------------
<S>                                     <C>         <C>           <C>           <C>        <C>
Operating Lease Obligations
     Greenberg Farrow Architecture

          - Tustin office                 $132,000                 $132,000     $     --    $       --
     Olen Lease - Irvine facility          $39,911      $39,911
     Amarillo Grant - Texas facility      $250,000     $250,000

Long-Term Debt
     Bank of America Line of Credit       $225,000     $225,000
     Notes Payable                        $191,583     $191,583

Convertible Debt                        $3,504,600   $3,504,600

Consulting Agreements
     National Strategies Inc.              $60,000      $60,000
                                        ----------   ----------    ---------    ---------   -----------
Total                                   $4,403,094   $4,271,094    $132,000     $     --    $       --
                                        ==========   ==========    =========    =========   ===========
</TABLE>

BUSINESS TRENDS

         There are three  business  trends  evident in the market today that are
material  to our  operations.  The first is the delay in the  procurement  cycle
until  after the  November  2004  election.  This  trend was  influenced  by two
factors:  1) the delay in the  distribution  of the federal  funds by the United
States  Election  Assistance  Commission,  and 2) the  presidential  election in
November 2004. The delay in the  distribution of the federal funds was caused by
the delay in nominating  and confirming  the Election  Assistance  Commissioners
(scheduled to be completed by April 2003,  but instead was completed in December
2003),  and the delay on the part of some states in meeting all the requirements
for the funds to be released by the  Election  Assistance  Commission.  With the
delay in funding until June 2004, less than five months before the November 2004
election,  the majority of counties decided not to risk making any changes until
after the November 2004 election.

         The second business trend is the growing momentum of the voter verified
paper audit trail movement.  As of May 2004,  eighteen states (Alabama,  Alaska,
Arizona, California, Connecticut, Georgia, Illinois, Maine, Maryland, Minnesota,
New Hampshire, New Jersey, New York, Ohio, Vermont,  Virginia, West Virginia and
Wisconsin) have either passed or are actively considering legislation that would
make it a requirement for any direct recording  electronic voting system used in
the state to produce a voter verified paper audit trail.  In another five states
(California, Missouri, Oregon, New Hampshire and Nevada), the Secretary of State
has issued a  directive  mandating  a voter  verified  paper  audit trail in the
state.

         The  third  business  trend  is the  growing  list of  states  that are
requiring direct recording  electronic  voting systems to be qualified under the
2002 federal voting system  standards.  This requirement is primarily focused in
states where  electronic  voting  systems have not been  previously  used (e.g.,
Illinois, Missouri, Iowa and North Carolina).

         Overall the net impact of these  trends on us is  positive.  We already
have a direct  recording  electronic  voting system with a voter  verified paper
audit trail  qualified  under the 1990 federal voting system  standards.  We are
currently  in the  process of testing  our direct  recording  electronic  voting
system under the 2002 federal  voting  system  standards.  We expect to complete
federal  qualification testing under the 2002 federal voting system standards by
January 31, 2005. This would place us in position as one of the few vendors with
a direct recording  electronic  voting system that is federally  qualified under
the 2002 voting system  standards and has a voter  verified paper audit trail in
time  for the  beginning  of the  procurement  cycle  after  the  November  2004
election. This is especially important in states like Missouri and Illinois that
have not previously  authorized direct recording electronic voting systems to be
used in the state,  but must at a minimum  meet the  accessibility  requirements
under HAVA (i.e.,  one direct  recording  electronic  voting machine per polling
place).

                                       33

<PAGE>

CRITICAL ACCOUNTING POLICIES

         The  preparation  of financial  statements  and related  disclosures in
conformity with accounting principles generally accepted in the United States of
America  ("GAAP")  requires  management  to  make  judgments,   assumptions  and
estimates  that  affect  the  amounts  reported  in our  consolidated  financial
statements  and the  accompanying  notes.  The amount of assets and  liabilities
reported on our balance  sheet and the amount of revenues and expenses  reported
for each of our fiscal periods are affected by estimates and assumptions,  which
are used for, but not limited to, the accounting for equity instruments  subject
to rescission,  software  development  costs,  estimated  allowance for doubtful
accounts,  the realizability of our investments in affiliated  companies and the
valuation  of  deferred  tax  assets.  Actual  results  could  differ from these
estimates. The following critical accounting policies are significantly affected
by judgments, assumptions and estimates used in the preparation of the financial
statements:

EQUITY INSTRUMENTS SUBJECT TO RESCISSION

         We account for common  stock and other equity  instruments  that may be
subject  to  rescission  claims at  estimated  fair value  (based on  applicable
measurement   criteria)  in  accordance   with  the   Securities   and  Exchange
Commission's  promulgated accounting rules and interpretive releases.  Under the
Securities  and Exchange  Commission's  interpretation  of GAAP,  reporting such
claims outside of stockholders' equity is required, regardless of how remote the
redemption event may be.

         We may be subject to possible claims for rescission with respect to the
sale or other  issuances of certain  common  stock,  options and  warrants.  The
consolidated  balance sheets included elsewhere herein reflect an adjustment for
the matter described below.

         Approximately  26.6  million  shares of our common  stock,  options and
warrants that were issued or granted in the United States  without  registration
or  qualification  under  federal or state  securities  laws during the two-year
period ended September 30, 2004 may be subject to rescission.  The fair value of
these  securities was estimated  based on a combination of (a) the selling price
of the common stock on the dates sold, (b) the price per the agreement for stock
issued  in  conversion  of debt,  (c) the fair  value of the stock  options  and
warrants on their grant dates, and (d) an independent  valuation.  Based in part
on advice of counsel, the fair value of these options and warrants was estimated
using  the  Black-Scholes  option-pricing  model.  Based  on  these  measurement
criteria,  our potential  liability directly  associated with the aforementioned
securities  transactions  is estimated to  approximate  $6.3 million  (including
interest) at September 30, 2004 plus legal fees and any fines or penalties  that
might be assessed by regulatory agencies.

         Based on advice of counsel,  the potential  liability  discussed  above
does not include  options to  purchase a total of 3.6  million  shares of common
stock issued to our president and to our chief  executive  officer because these
two individuals are also principal stockholders;  acting together, they have the
ability  to  control  us. The grant  date  estimated  fair value of the  options
described in this paragraph (excluding interest) approximates $1,360,000.

         Management  is unable to  determine  at this time whether any claim for
rescission may be filed against us; however, there can be no assurance that such
claims will not be asserted.  In addition,  regulatory  agencies  could launch a
formal investigation and/or institute an enforcement proceeding against us.

         The ultimate  outcome of the matters  discussed  above is not presently
determinable. Accordingly, management is unable to estimate the total liability,
if any, that we may incur as a result of such  contingencies.  Regardless of how
remote a rescission  event may be, GAAP as  interpreted by the SEC requires that
equity securities subject to rescission be reported outside of the stockholders'
equity section of the balance sheet until the applicable statutes of limitations
have expired.  Thus, we have reported  approximately  $6.3 million as "mezzanine
equity" in the September 30, 2004 condensed consolidated balance sheet.

         Approximately  8.5  million  shares  of  our  common  stock  issued  in
connection with the  acquisition of Z prompt,  with an  issuance-date  estimated
fair value of approximately  $1.8 million,  have been excluded from the June 30,
2003 mezzanine equity amount, as the acquisition was not recorded until November
2003  for  reasons  described  in Note 3 to the  annual  consolidated  financial
statements.

                                       34

<PAGE>

CAPITALIZED SOFTWARE DEVELOPMENT COSTS

         In accordance with Statement of Financial Accounting Standards ("SFAS")
No. 86  "Accounting  for the Costs of  Computer  Software  to be Sold  Leased or
Otherwise  Marketed," we capitalize  certain costs related to the development of
new software  products or the enhancement of existing software products for sale
or  license.   These  costs  are  capitalized   from  the  point  in  time  that
technological feasibility has been established,  as evidenced by a working model
or  detailed  working  program  design to the point in time that the  product is
available for general release to customers.  Capitalized  development  costs are
amortized on a  straight-line  basis over the  estimated  economic  lives of the
products, beginning with the general product release to customers.  Research and
development costs incurred prior to establishing  technological  feasibility and
costs incurred subsequent to general product release to customers are charged to
expense as incurred.  We periodically  evaluate  whether events or circumstances
have occurred that indicate that the remaining  useful lives of the  capitalized
software  development  costs should be revised or that the remaining  balance of
such assets may not be recoverable.

         At September  30, 2004,  we believe that no revisions to the  remaining
useful  lives or  write-down  of  capitalized  software  development  costs  are
required.  Our systems were qualified as meeting  certain  federal voting system
standards  in late March 2004.  We began  amortizing  the  capitalized  software
development costs over a period of thirty-six months beginning April 2004.

STOCK BASED COMPENSATION

         We account for stock-based  compensation  issued to employees using the
intrinsic  value based  method as  prescribed  by  Accounting  Principles  Board
Opinion No. 25 (APB 25),  "Accounting for Stock issued to Employees."  Under the
intrinsic value based method, compensation expense is the excess, if any, of the
fair  value of the stock at the grant  date or other  measurement  date over the
amount an employee must pay to acquire the stock.  Compensation expense, if any,
is recognized over the applicable  service period,  which is usually the vesting
period.

         SFAS 123, "Accounting for Stock-Based  Compensation," if fully adopted,
changes the method of accounting for employee stock-based  compensation plans to
the fair value  based  method.  For stock  options and  warrants,  fair value is
estimated  using an option pricing model that takes into account the stock price
at the grant  date,  the  exercise  price,  the  expected  life of the option or
warrant,   stock  volatility  and  the  annual  rate  of  quarterly   dividends.
Compensation  expense, if any, is recognized over the applicable service period,
which is usually the vesting period.

         The adoption of the accounting  methodology of SFAS 123 is optional and
we have elected to continue  accounting for stock-based  compensation  issued to
employees using APB 25;  however,  pro forma  disclosures,  as if we adopted the
cost recognition  requirement under SFAS 123, are required to be presented.  For
stock-based  compensation issued to non-employees,  we use the fair value method
of accounting under the provisions of SFAS 123.

         Financial Accounting Standards Board (FASB)  Interpretation No. 44 (FIN
44),  "Accounting  for Certain  Transactions  Involving Stock  Compensation,  an
Interpretation  of APB  25"  clarifies  the  application  of APB 25 for  (a) the
definition  of employee  for  purposes of applying  APB 25, (b) the criteria for
determining  whether  a plan  qualifies  as a non  compensatory  plan,  (c)  the
accounting  consequence for various  modifications  to the terms of a previously
fixed  stock  option or award and (d) the  accounting  for an  exchange of stock
compensation  awards in a business  combination.  We believe that we account for
transactions involving stock compensation in accordance with FIN 44.

         SFAS 148,  "Accounting  for  Stock-Based  Compensation - Transition and
Disclosure,  an  amendment  of SFAS No. 123,"  provides  alternative  methods of
transition  for a voluntary  change to the fair value based method of accounting
for stock-based employee  compensation.  In addition,  this statement amends the
disclosure  requirements  of SFAS 123 to require  prominent  disclosures in both
annual and  interim  financial  statements  about the method of  accounting  for
stock-based employee  compensation and the effect of the method used on reported
results.

                                       35

<PAGE>

FINANCIAL REPORTING RELATED TO WEB TOOLS INTERNATIONAL, INC.

         In January 2003, the FASB issued FIN No. 46, "Consolidation of Variable
Interest  Entities,  an Interpretation of ARB 51". The primary objectives of FIN
No. 46 are to provide  guidance  on the  identification  of  entities  for which
control is achieved  through means other than voting rights  (variable  interest
entities),  and how to  determine  when and  which  business  enterprise  should
consolidate  the  variable  interest  entity.  This new model for  consolidation
applies to an entity for which  either:  (a) the equity  investors do not have a
controlling  financial  interest;  or (b)  the  equity  investment  at  risk  is
insufficient to finance that entity's  activities  without receiving  additional
subordinated  financial  support from other  parties.  In  addition,  FIN No. 46
requires  that both the primary  beneficiary  and all other  enterprises  with a
significant  variable  interest in a variable  interest  entity make  additional
disclosures.  As amended in December 2003, the effective dates of FIN No. 46 for
us are as follows:  (a) for  interests in  special-purpose  entities:  the first
period ended after  December  15, 2003;  and (b) for all other types of variable
interest entities: the first period ended after March 15, 2004.

         As disclosed in the notes to our  accompanying  consolidated  financial
statements, we are associated with Web Tools International,  Inc. through common
ownership;  in  addition,  we were  virtually  Web  Tools  International's  only
customer for software  development  services in fiscal 2003.  Based on these and
other  factors,  we determined  that (1) Web Tools  International  is a variable
interest  entity and (2) we were its primary  beneficiary as of January 1, 2004.
Therefore,  effective  January 1, 2004, the accounts of Web Tools  International
were consolidated with those of AccuPoll.  For reasons explained in the notes to
our June 30, 2004 consolidated  financial statements,  the accounts of Web Tools
International were de-consolidated effective April 1, 2004.

THE CONTINUED CONSOLIDATION OF A SUBSIDIARY IN BANKRUPTCY

         As discussed in the notes to our  accompanying  consolidated  financial
statements, Z prompt (a wholly-owned subsidiary) filed bankruptcy in March 2004.
We are the single  largest  pre-petition  creditor of Z prompt.  Management  has
determined that it would not be meaningful to  de-consolidate  the accounts of Z
prompt at this time because we (a) have a substantial  negative  investment in Z
prompt  as of  September  30,  2004 and (b)  expect to  regain  control  of this
subsidiary  based on the  expectation  that Z prompt will be able to negotiate a
confirmed  reorganization plan and emerge from bankruptcy by approximately March
2005.

RECENT ACCOUNTING PRONOUNCEMENTS

         We  continue  to assess  the  effects  of  recently  issued  accounting
standards.  The impact of all recently adopted and issued  accounting  standards
has been disclosed in Note 1 of the accompanying annual  consolidated  financial
statements.

                    QUANTITATIVE AND QUALITATIVE DISCLOSURES
                                ABOUT MARKET RISK

         Changes in United  States  interest  rates  would  affect the  interest
earned on our cash and cash  equivalents.  Based on our  overall  interest  rate
exposure at September 30, 2004, a near-term  change in interest rates,  based on
historical  movements,  would not  materially  affect the fair value of interest
rate sensitive  instruments.  Our debt instruments have fixed interest rates and
terms and,  therefore,  a significant  change in interest rates would not have a
material adverse effect on our financial position or results of operations.

                                       36

<PAGE>

                                   MANAGEMENT

DIRECTORS AND OFFICERS

         Our current directors and executive officers are as follows:

NAME (1) (2)         AGE   POSITION
----                 ---   --------
Dennis Vadura        43    Chief Executive Officer and Director
Frank J. Wiebe       44    President, Secretary, Treasurer and Director
Craig A. Hewitt      37    Chief Financial Officer
Chester Noblett Jr.  60    Executive Vice President, Sales
Jo-Ann Zakielarz     52    Vice President, Government Affairs/Global Alliances
Andrea M. Porcelli   36    Director
Phil Trubey          41    Director

(1)      We do not have a separately designated executive committee,  nominating
         committee or audit committee of the Board of Directors.

(2)      Our executive  officers hold office until their  successors are elected
         and qualified, or until their death, resignation or removal.

         The background and principal occupations of each director and executive
officer are as follows:

         Mr. Vadura became a director and our Chief Executive Officer on May 20,
2002. From April 2000 to the present, he has been the Chief Executive Officer of
Web Tools  International,  Inc. From April 1999 to April 2000,  Mr. Vadura was a
senior technical  architect  employed by Electronic Data Systems  ("EDS").  From
1996 to April  1999,  he was  employed by  companies  acquired by EDS in similar
positions.

         Mr. Wiebe became a director and our President,  Secretary and Treasurer
on May 20, 2002. From May 2000 to the present, he has been the Vice President of
Web Tools  International,  Inc. From November 1992 to the present, he has been a
Strategic Program Manager with EDS E.solutions business unit. He previously held
various positions with the Gemini Group.

         Mr. Hewitt became our Chief  Financial  Officer in May 2002. Mr. Hewitt
also  owns and  operates  Hewitt &  Associates,  Inc.,  a  financial  consulting
company.  From August 2000 to September 2001, he was the Chief Financial Officer
of Junum Incorporated,  a public company engaged in credit and finance services.
From   August   1998  to  August   2000,   Mr.   Hewitt   was  Chief   Financial
Officer/Controller for Universal Broadband Networks, a public company engaged in
telecommunications.

         Mr.  Noblett  has been Vice  President  of Sales since July 2002 and is
responsible for our sales organization.  He was Chief Executive Officer for eSAT
from June 1999 until  December  2001.  From  January1997  to February  1998, Mr.
Noblett  served as interim  Chief  Financial  Officer  of eSAT and  subsequently
served as Chief Operating Officer as eSAT until June 1999.

         Ms.  Zakielarz was hired as Vice President of Government  Relations and
Global  Alliances in January 2003.  Ms.  Zakielarz was with Unisys Corp.  for 13
years where she developed,  promoted and  implemented  technology  solutions for
state and local  election  officials.  Her  experience  ranged from  selling and
consulting   on   the    implementation    of   precinct   voting   systems   to
statewide-centralized voter registration systems.

         Ms. Andreea M. Porcelli  became a director on May 20, 2002. From August
2, 2002 to the present Ms.  Porcelli  has been an  independent  consultant  with
Continental  Advisors S.A.  (U.K.).  From October 2000 to August 2002, she was a
registered representative of Schneider Securities, Inc. From May 2000 to October
2000, she was a registered  representative of Berry-Shino Securities,  Inc. From
March 1999 to May 2000, Ms. Porcelli was a registered  representative of Paulson
Investment Company, Inc.

         Mr. Phil Trubey was  appointed  to our Board of Directors on August 27,
2004.  Mr.  Trubey  was  the  CEO  of   Merchandising   Avenue,   an  e-commerce
infrastructure  startup  from 1999 to 2001.  In 1994,  Mr.  Trubey  founded  and

                                       37

<PAGE>

operated Websense, Inc., an enterprise software company, until 1999.

FAMILY RELATIONSHIPS

         There  are no family  relationships  between  or among  our  directors,
executive  officers or persons nominated or charged by us to become directors or
executive officers.

INVOLVEMENT IN LEGAL PROCEEDINGS

                  In December 2003, Paul Musco,  the  ex-President of our wholly
owned subsidiary,  Z prompt, Inc. filed suit against us and Z prompt in Superior
Court of California,  County of Orange,  California. The claim alleged breach of
contract, fraud and misrepresentation  stemming from our acquisition of, and his
termination of his employment  with, Z prompt.  Mr. Musco is seeking  damages in
excess of $800,000,  plus punitive  damages.  We believe that Mr. Musco breached
his  agreements  with Z prompt  and have filed a cross  complaint  for breach of
contract, fraud, negligence and breach of fiduciary duty seeking $2,000,000. Mr.
Musco has since filed his own cross-complaint  against us, Dennis Vadura,  Frank
Wiebe and Craig Hewitt alleging fraud and tortious  interference  with contract.
In addition,  Michael  Shockett has joined the suit and filed a cross  complaint
against  us, Z prompt,  Dennis  Vadura,  Frank Wiebe and Craig  Hewitt  alleging
fraud,  tortious  interference with contract and wrongful  termination.  Michael
Shockett  was  terminated  from  employment  with us in April  2004  for  cause.
Although no assurance  can be given that we will prevail on the merits,  we will
vigorously defend these allegations.

                  In October 2003, a former employee of Z prompt,  Nathalie Luu,
filed suit against us and Z prompt in Superior  Court of  California,  County of
Orange,  California.  The complaint  claims  wrongful  termination,  intentional
infliction of emotional distress and retaliatory discharge, based on allegations
that the plaintiff was terminated for reporting to management alleged fraudulent
accounting  practices  by Z prompt  management.  The former  employee is seeking
$112,000 in monetary  damages  including loss of wages,  plus punitive  damages.
This suit is currently in  negotiations to be settled for $100,000 to be paid by
the issuance by us of common stock.  A settlement  would release us and Z prompt
from liability in connection with the suit.

         On March 23, 2004, our wholly-owned subsidiary, Z prompt, Inc., filed a
petition for relief under Chapter 11 of the United States Bankruptcy Code in the
United States Bankruptcy Court,  Central District of California.  Z prompt,  and
its  bankruptcy  counsel are in the process of preparing a disclosure  statement
and proposed plan of  re-organization.  Mr. Vadura and Mr. Wiebe who are our CEO
and  President,  respectively,  are also  directors  of Z prompt,  and held such
positions at the time of the bankruptcy  filing. Mr. Vadura is also the Chairman
of Zprompt,  and Mr. Wiebe is a Director of Z prompt.  Mr. Hewitt,  our CFO, was
formerly a member of Z prompt's Board of Directors,  but resigned from the Board
of Z prompt prior to the bankruptcy filing

         Based  solely in reliance on  representations  made by our officers and
directors,  during the past five  years,  none of the  following  occurred  with
respect to such persons:  (1) no petition under the Federal  bankruptcy  laws or
any state insolvency law was filed by or against, or a receiver, fiscal agent or
similar  officer was  appointed  by a court for the business or property of such
persons;  (2) other than the Z prompt bankruptcy described above, there has been
no petition under the Federal  bankruptcy laws or any state insolvency law filed
by or against,  or a receiver,  fiscal agent or similar  officer  appointed by a
court for the business or property of any partnership in which such persons were
a general partner at or within two years before the time of such filing,  or any
corporation  or  business  association  of which  such  persons  were  executive
officers  at or within  two years  before the time of such  filing;  (3) no such
persons were  convicted  in a criminal  proceeding  or are a named  subject of a
pending  criminal  proceeding  (excluding  traffic  violations  and other  minor
offenses);  (4) no such  persons  were the  subject  of any order,  judgment  or
decree,  not subsequently  reversed,  suspended or vacated,  of any court of any
competent   jurisdiction,   permanently  or  temporarily   enjoining,   barring,
suspending  or  otherwise  limiting  their  involvement  in any type of business
practice, or in securities or banking or other financial institution activities;
and (5) no such  persons were found by a court of  competent  jurisdiction  in a
civil action by the SEC or by the Commodity  Futures Trading  Commission to have
violated any Federal or state  securities or  commodities  law, and the judgment
has not been reversed, suspended or vacated.

                                       38

<PAGE>

                             EXECUTIVE COMPENSATION

         The  following  table  sets  forth  information  concerning  the  total
compensation  that we have  paid or that has  accrued  on  behalf  of our  chief
executive  officer  and  other  executive  officers  with  annual   compensation
exceeding  $100,000  (collectively,  the "named executive  officers") during the
fiscal years ending June 30, 2004, 2003 and 2002.

                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                                                               LONG-TERM
                                                                                              COMPENSATION
                                                                                -----------------------------------------
                                                  ANNUAL COMPENSATION                     AWARDS             PAYOUTS
                                          -------------------------------------------------------------------------------
                                                                     OTHER                      SECURITIES                   ALL
                                                                     ANNUAL      RESTRICTED     UNDER-LYING                 OTHER
             NAME AND                                               COMPEN-         STOCK        OPTIONS/       LTIP       COMPEN-
        PRINCIPAL POSITION       YEAR   Salary ($)   BONUS ($)     SATION ($)    AWARD(S) ($)    SARS (#)    PAYOUTS ($)  SATION ($)
------------------------------------------------------------------------------------------------------------------------------------
<S>                              <C>     <C>            <C>           <C>          <C>          <C>             <C>          <C>
Frank Wiebe,                     2004    $126,500       -0-           -0-           -0-                 0       -0-          -0-
     President                   2003    $115,000       -0-           -0-           -0-         1,200,000       -0-          -0-
                                 2002    $ 28,750       -0-           -0-           -0-         2,016,000       -0-          -0-
Dennis Vadura,                   2004    $126,500       -0-           -0-           -0-                 0       -0-          -0-
     Chief Executive Officer     2003    $115,000       -0-           -0-           -0-         2,400,000       -0-          -0-
                                 2002    $ 28,750       -0-           -0-           -0-         4,032,000       -0-          -0-
</TABLE>

- Personal  benefits  received by the named executive  officers are valued below
the levels which would otherwise require  disclosure under the rules of the U.S.
Securities and Exchange Commission.

- We do not currently  provide any contingent or deferred forms of  compensation
arrangements,  annuities,  pension  or  retirement  benefits  to our  directors,
officers or employees.

- We have employment agreements with Dennis Vadura and Frank J. Wiebe.

OPTIONS GRANTS

         We made no grants of stock  options  during  fiscal year ended June 30,
2004 to any of the named executive officers.

               AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND
                          FISCAL YEAR-END OPTION VALUES

         The following  table  provides  information  concerning  the number and
value of stock options exercised during the fiscal year ended June 30, 2004, and
held at the end of such fiscal year, by the named executive officers.

<TABLE>
<CAPTION>
              AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES

         (A)                   (B)                 (C)                   (D)                     (E)
                                                                NUMBER OF SECURITIES
                                                                UNDERLYING              VALUE OF UNEXERCISED
                                                                UNEXERCISED             IN-THE-MONEY
                                                                OPTIONS/SARS AT JUNE    OPTIONS/SARS AT JUNE
                                                                30, 2004 (#)            30, 2004 ($)
                        SHARES ACQUIRED                         EXERCISABLE/            EXERCISABLE/
         NAME           ON EXERCISE (#)     VALUE REALIZED ($)  UNEXERCISABLE           UNEXERCISABLE
------------------------------------------------------------------------------------------------------------
<S>                           <C>                <C>            <C>                   <C>
Frank Wiebe                    0                  N/A             2,300,000/916,000      $974,500/$423,020
Dennis Vadura                  0                  N/A           4,600,000/1,832,000    $1,949,000/$846,040
</TABLE>

                                       39

<PAGE>

EXECUTIVE EMPLOYMENT AGREEMENTS

         On May 20, 2002,  we entered  into  employment  agreements  with Dennis
Vadura, our Chief Executive Officer,  and Frank Wiebe, our President,  Secretary
and Treasurer.  Each employment agreement has a three-year term and provides for
an annual base salary of $115,000, with a minimum annual 10% increase (beginning
in fiscal 2004) as  determined by our board of directors.  The  agreements  also
provide that  Messrs.  Vadura and Wiebe will be entitled to  participate  in our
management  stock  incentive  plan  as  soon as  reasonably  practicable.  Bonus
compensation,  if any,  is to be  determined  by the Board of  Directors  or the
Compensation  Committee  of the Board of  Directors,  but cannot  exceed 100% of
their then applicable annual salary. Under the agreements,  if either Mr. Vadura
or Mr. Wiebe voluntarily  resign or are terminated with cause (as defined in the
agreements),  he will only be entitled to receive his  compensation  through the
date of  termination.  If either  Mr.  Vadura's  or Mr.  Wiebe's  employment  is
terminated by either  officer for good reason (as defined in the  agreements) or
by us without cause, he will be entitled to a lump-sum  severance  payment in an
amount  equal to his then  current  annual  salary  and we will be  required  to
provide all of his benefits for a twelve month  period.  If either Mr. Vadura or
Mr.  Wiebe is  permanently  disabled,  we will pay him his then  current  annual
salary and provide all benefits through the remainder of the calendar year and a
three-month period  thereafter.  If either Mr. Vadura or Mr. Wiebe dies, we will
pay his then current  annual  salary  through the  calendar  month in which such
death occurs.

         On May 29, 2004,  we renewed the  agreement  with Hewitt &  Associates,
Inc.  which  provides for the services of Craig Hewitt as our  consultant  Chief
Financial Officer. This agreement provides for compensation of $7,500 per month.
This agreement expires on May 29, 2005.

BENEFIT PLANS

         We do not have any pension plan,  profit sharing plan, or similar plans
for the  benefit  of our  officers,  directors  or  employees.  However,  we may
establish such plans in the future.

BOARD COMPENSATION

         We do not have any formal or informal  arrangements  or  agreements  to
compensate  our  directors  for services they provide as members of our Board of
Directors.

                                PERFORMANCE GRAPH

         The  following  performance  graph  assumes  an  investment  of $100 on
6/30/2002  and compares the change to June 30, 2004, in the market prices of our
common  stock  with the  change a broad  market  index (S & P 500 - U.S.) and an
Special  Composite  Index comprised of the following  Companies:  GPTX, NCR, and
TRMM. We have paid no dividends.  The  performance  of the indices is shown on a
total return (dividend  reinvestment)  basis. The graph lines merely connect the
prices on the dates  indicated  and do not reflect  fluctuations  between  those
dates.

                  6/30/2000   6/30/2001    6/30/2002     6/30/2003    6/30/2004
                  -------------------------------------------------------------
ACUP                   n/a        n/a       $ 100.00      $ 79.17     $  84.39
S&P 500                n/a        n/a       $ 100.00      $ 98.44     $ 115.25
Special Composite*     n/a        n/a       $ 100.00      $ 79.86     $ 164.02

*  Includes  the  following  three  companies:  GPTX,  $5.95/share  at  6/30/02,
$4.39/share  at 6/30/03,  and  $3.70/share  at  6/30/04;  NCR,  $34.60/share  at
6/30/02,  $26.76/share  at  6/30/03,  and  $49.59/share  at  6/30/04;  and TRMM,
$85/share at 6/30/02, $1.85/share at 6/30/03, and $14.49/share at 6/30/04.

                                       40

<PAGE>

                              [LINE CHART OMITTED]

         SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following table sets forth certain  information,  as of January 31,
2005 with respect to the beneficial ownership of the outstanding common stock by
(i) any holder of more than five (5%)  percent;  (ii) each of our  directors and
named executive  officers;  and (iii) our directors and named executive officers
as a group. Except as otherwise indicated, each of the stockholders listed below
has sole voting and investment power over the shares beneficially owned.

<TABLE>
<CAPTION>
                                                                                       Percentage of         Percentage of
                                                                                        Common Stock          Common Stock
                                                                Common Stock          Ownership Before      Ownership After
Name of Beneficial Owner (1)                               Beneficially Owned (2)       Offering (2)          Offering (3)
-------------------------------------------------------------------------------------------------------------------------------
<S>                                                              <C>                       <C>                  <C>
Dennis Vadura (4) (5) (6)                                        55,718,560                23.9%                 17.9%
Frank Wiebe (4) (5) (7)                                          43,463,040                18.9%                 14.1%
Andrea M. Porcelli                                                        0                  *                     *
Phil Trubey (8)                                                  17,464,220                 7.4%                  5.6%
Hyde Investments Ltd. (9)                                        41,120,000                15.3%                 11.9%
Livingston Investments Ltd. (10)                                 38,080,000                14.4%                 11.1%
Palisades Holdings LLC (11)                                      33,440,000                12.8%                  9.9%
-------------------------------------------------------------------------------------------------------------------------------
All officers and directors as a group (4 persons)               116,645,820                 47.6%                 36.2%
</TABLE>

      * Less than 1%.

(1)      Except as otherwise indicated,  the address of each beneficial owner is
         c/o AccuPoll Holding Corp., 15101 Red Hill Ave. Suite # 220, Tustin, Ca
         92780.

(2)      Applicable  percentage  ownership  is based on  226,969,412  shares  of
         common  stock  outstanding  as  of  January  31,  2005,  together  with
         securities  exercisable  or  convertible  into  shares of common  stock
         within 60  days of January 31,  2005 for each  stockholder.  Beneficial
         ownership is determined in

                                       41

<PAGE>

         accordance with the rules of the Securities and Exchange Commission and
         generally   includes  voting  or  investment   power  with  respect  to
         securities.  Securities  that are currently  exercisable or exercisable
         within 60 days of January 31, 2005 are deemed to be beneficially  owned
         by the person holding such  securities for the purpose of computing the
         percentage  of  ownership  of  such  person,  but are  not  treated  as
         outstanding  for the purpose of computing the  percentage  ownership of
         any other person.

(3)      Based on 305,064,705 shares outstanding.

(4)      Includes   3,064,000   shares  of  common   stock  held  by  Web  Tools
         International,  Inc., a company owned and controlled by Messrs.  Vadura
         and Mr. Wiebe.

(5)      Includes  18,400,000 shares of common stock as to which Messrs.  Vadura
         and Wiebe have shared  voting  power  pursuant to  irrevocable  proxies
         granted by  stockholders.  Messrs.  Vadura  and Wiebe have no  economic
         interest in such stock.

(6)      Includes an option to purchase 2,100,000 shares at an exercise price of
         $.91 per  share  which  expires  on June 18,  2013;  and an  option  to
         purchase  3,808,000  shares at an  exercise  price of $.3125  per share
         which expires on May 29, 2012

(7)      Includes an option to purchase 1,050,000 shares at an exercise price of
         $.91 per  share  which  expires  on June 18,  2013;  and an  option  to
         purchase  1,904,000  shares at an  exercise  price of $.3125  per share
         which expires on May 29, 2012.

(8)      Includes   9,057,970  shares  of  common  stock   underlying   warrants
         exercisable at $1.55 per share.

(9)      Assumes  conversion of $1,028,000 debt (due December 31, 2004) at $.025
         per share into 41,120,000 shares.

(10)     Assumes  conversion  of $952,000  debt (due December 31, 2004) at $.025
         per share into 38,080,000 shares.

(11)     Assumes  conversion  of $836,000  debt (due December 31, 2004) at $.025
         per share into 33,440,000 shares.

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

         The  following  table  shows  information  with  respect to each equity
compensation  plan under which our common stock is authorized for issuance as of
the fiscal year ended June 30, 2004.

<TABLE>
<CAPTION>
           PLAN CATEGORY              NUMBER OF SECURITIES       WEIGHTED AVERAGE        NUMBER OF SECURITIES
                                        TO BE ISSUED UPON       EXERCISE PRICE OF      REMAINING AVAILABLE FOR
                                           EXERCISE OF         OUTSTANDING OPTIONS,     FUTURE ISSUANCE UNDER
                                      OUTSTANDING OPTIONS,     WARRANTS AND RIGHTS    EQUITY COMPENSATION PLANS
                                       WARRANTS AND RIGHTS                              (EXCLUDING SECURITIES
                                                                                       REFLECTED IN COLUMN (A)
-----------------------------------------------------------------------------------------------------------------
<S>                                 <C>                            <C>                      <C>
                                            (A)                      (B)                       (C)
-----------------------------------------------------------------------------------------------------------------
EQUITY COMPENSATION PLANS APPROVED
BY SECURITY HOLDERS                         -0-                      -0-                       N/A
-----------------------------------------------------------------------------------------------------------------
EQUITY COMPENSATION PLANS NOT
APPROVED BY SECURITY HOLDERS             75,699,913                 $0.44                    7,765,829
-----------------------------------------------------------------------------------------------------------------
TOTAL                                    75,699,913                 $0.44                    7,765,829
-----------------------------------------------------------------------------------------------------------------
NOTES                                (1) (2) (3) (4) (5)                                        (6)
-----------------------------------------------------------------------------------------------------------------
</TABLE>

(1)      Included in the total are  16,954,492  warrants  issued  with  exercise
         prices between $.06 and $1.55 per share from inception through June 30,
         2004, in connection  with debt  instruments,  minus  2,000,000 of these
         warrants  exercised  into shares of common stock at a price of $.50 per
         share.

(2)      Included in the total are  63,573,214  warrants  issued  with  exercise
         prices between $.06 and $1.55 per share from inception through June 30,
         2004, in connection with equity instruments,  minus 25,649,020 of these

                                       42

<PAGE>

         warrants  exercised  into shares of common stock at prices between $.06
         and $.35 per share.

(3)      Included  in the total are  4,553,551  warrants  issued  with  exercise
         prices between $.06 and $.75 per share from inception  through June 30,
         2004,  for  placement  agent  fees,  minus  631,000  of these  warrants
         exercised  into shares of common stock at prices  between $.06 and $.75
         per share.

(4)      Included  in the total are  7,552,336  warrants  issued  with  exercise
         prices between $.06 and $1.54 per share from inception through June 30,
         2004,  for  services  rendered,   minus  1,153,660  of  these  warrants
         exercised  into shares of common stock at prices  between $.08 and $.75
         per share.

(5)      Included in the total are  13,050,000  options  issued to employees and
         consultants  with exercise prices between $.31 and $1.54 per share from
         inception through June 30, 2004, for employment services, minus 550,000
         of these  options  exercised  into  shares  of  common  stock at prices
         between $.31 and $.75 per share.  Such  options were granted  under the
         Plan described in Note 6 below.

(6)      We have a 2002  Consultant  Compensation  Plan which  authorizes  us to
         grant  non-qualified  stock options with or without stock  appreciation
         rights  (SAR's)  and  stock  bonuses  to  our  consultants.  There  are
         12,000,000  shares of common stock  available for grant to participants
         under the plan. Our board of directors  determined to adopt the plan to
         retain  and  compensate   employees  and  consultants  and  to  provide
         additional incentives for employees and consultants. Shares involved in
         the  unexercised  portion of any terminated or expired option may again
         be available for grant, provided that to the extent any option in whole
         or in part is  surrendered  as the result of the exercise of a SAR, the
         shares subject to the surrendered  portion of the option will no longer
         be available for use under the plan.  The exercise  price of any option
         issued under the plan may not be less than 85% of the fair market value
         of the shares on the date of grant.

                 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

MASTER SERVICES AGREEMENT

         In April 2002, we entered into a Master Services  Agreement whereby Web
Tools  International,  Inc.  (WTI)  provided  substantially  all  non-production
services related to the manufacture of our voting system. Under the agreement we
were  charged  hourly rates for WTI's  employees  who worked on  developing  the
computer  software for the Company's Voting System.  In addition,  we reimbursed
WTI for all  reimbursable  expenses,  as defined in the  agreement.  We were not
charged for the use of the office  space or fixed  assets of WTI.  All  overhead
related  charges were  included in the basic hourly rates  charged to us by WTI.
The  agreement  expired  on March 31,  2004.  All ideas,  inventions,  concepts,
know-how,   methods,   methodologies,    processes,   algorithms,    techniques,
compilations,  software and other works of authorship  of any nature  created or
developed  by WTI during  the course of  performance  of the  agreement  are our
exclusive property.  WTI is owned and operated by Dennis Vadura and Frank Wiebe.
Mr. Vadura is our Chief Executive Officer, a director and stockholder. Mr. Wiebe
is our President, Treasurer, Secretary, a director and a stockholder. During the
fiscal year ended June 30, 2004,  WTI invoiced  approximately  $1,450,000  to us
under the terms of the agreement, of which approximately $1,487,000 remained due
and payable as of June 30, 2004.

         From January 2002 to June 30, 2004,  Andrea  Porcelli,  a member of our
board of directors, has assisted us in the placement of our securities offerings
in Europe.  These offerings were excluded from registration under the Securities
Act pursuant to Regulation S. As compensation  for these services,  Ms. Porcelli
was  entitled to receive  $528,000 in cash and warrants to purchase an aggregate
of 1,501,752  shares of our common stock at exercise  prices ranging from $.1224
to $.75 per share. Ms. Porcelli has directed us to pay all cash compensation and
issue all warrants to Montacino Ltd,  Southampton Ltd and  Continental  Advisors
S.A. Ms. Porcelli has advised us that she is not a beneficial owner or affiliate
of any of these entities.

                                       43

<PAGE>

      COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES

         Our Bylaws  authorize us to indemnify  any person who was or is a party
or is threatened  to be made a party to any  threatened,  pending,  or completed
action,  or suit by reason  of the fact  that he or she is or was our  director,
officer,  employee, or agent, or is or was serving at our request as a director,
officer, employee, or agent of another corporation,  partnership, joint venture,
trust  or  other  enterprise,  against  expenses  (including  attorneys'  fees),
judgments,  fines,  and  amounts  paid in  settlement  actually  and  reasonably
incurred by him or her in connection  with any such action,  suit or proceeding,
if he or she acted in good faith and in a manner he or she  reasonably  believed
to be in or not opposed to our best interests, and, with respect to any criminal
action or proceeding,  had no reasonable cause to believe his or her conduct was
unlawful. The termination of any action, suit, or proceeding by judgment, order,
settlement,  conviction,  or upon a plea of nolo  contendre  or its  equivalent,
shall not, of itself,  create a presumption  that the person did not act in good
faith  and in a  manner  which  he or she  reasonably  believed  to be in or not
opposed  to our best  interests,  and with  respect  to any  criminal  action or
proceeding,  he or she had  reasonable  cause to believe that his or her conduct
was unlawful.  No indemnification may be made in respect of any claim, issue, or
matter as to which such a person has been  adjudged to be liable for  negligence
or  misconduct in the  performance  of his or her duty to us, unless and only to
the extent that the court in which the action or suit was brought  determines on
application  that,  despite the  adjudication  of  liability  but in view of all
circumstances  of the case,  the person is fairly  and  reasonably  entitled  to
indemnity for such expenses as the court deems proper.

         To the extent that a  director,  officer,  employee,  or agent has been
successful  on the  merits  or  otherwise  in  defense  of any  action,  suit or
proceeding,  or in defense of any claim,  issue,  or matter  therein,  he or she
shall be indemnified against expenses  (including  attorneys' fees) actually and
reasonably  incurred  by  him  or  her  in  connection   therewith.   Any  other
indemnification  shall be made upon a determination that  indemnification of the
officer, director,  employee, or agent is proper in the circumstances because he
or she has met the applicable  standard of conduct set forth in our Bylaws. Such
determination  shall be made either: (i) by our Board of Directors by a majority
of a quorum consisting of directors who were not parties to such action, suit or
proceeding;  (ii) by independent legal counsel on a written opinion; or (iii) by
our  shareholders  by a majority vote of a quorum of shareholders at any meeting
duly called for such purpose.

         By its terms, the  indemnification  provided by our Bylaws shall not be
deemed exclusive of any other indemnification granted under any provision of any
statute,  in our Articles of Incorporation,  in our Bylaws,  agreement,  vote of
shareholders or  disinterested  directors,  or otherwise,  both as to his or her
official  capacity  and as to action in  another  capacity  while  holding  such
office,  and shall  continue  as to a person  who has  ceased to be a  director,
officer,  employee,  or agent,  and shall  inure to the benefit of the heirs and
legal representatives of such a person.

         We are authorized by our Bylaws to pay expenses incurred of a director,
officer,  employee or agent in  defending a civil or  criminal  action,  suit or
proceeding  in  advance  of the  final  disposition  of such  action,  suit,  or
proceeding  upon a majority  vote of a quorum of our Board of Directors and upon
receipt of an undertaking by or on behalf of the director,  officer, employee or
agent to repay such amount or amounts unless it is ultimately determined that he
or she is to be indemnified by us.

         Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the  "Act" or  "Securities  Act") may be  permitted  to  directors,
officers or persons  controlling  us pursuant to the  foregoing  provisions,  or
otherwise,  we have been  advised  that in the  opinion  of the  Securities  and
Exchange Commission,  such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable.

                                  LEGAL MATTERS

         The validity of the shares of common stock being offered hereby will be
passed upon for us by Sichenzia Ross Friedman Ference LLP, New York, New York.

                                       44

<PAGE>

                                     EXPERTS

         Our  financial  statements  as of and for the years ended June 30, 2004
and 2003, and the related consolidated  statements of operations,  stockholders'
deficit and cash flows for the period from  August 9, 2001  (Inception)  through
June 30, 2002 and for the years  ended June 30, 2004 and 2003,  included in this
prospectus,  have  been  audited  by Squar,  Milner,  Reehl &  Williamson,  LLP,
independent  registered public accountants,  as stated in their report appearing
herein and are so included herein in reliance upon the report of such firm given
upon their authority as experts in accounting and auditing.

                       WHERE YOU CAN FIND MORE INFORMATION

         We have filed with the SEC a  registration  statement on Form S-1 under
the Securities Act for the common shares sold in this offering.  This prospectus
constitutes a part of that  registration  statement.  This  prospectus  does not
contain all of the information set forth in the  registration  statement and the
regulations  of the SEC.  Accordingly,  you should  reference  the  registration
statement  and its exhibits for further  information  with respect to us and our
common shares being sold in this offering.  Copies of the registration statement
and its exhibits are on file at the offices of the SEC and on its web site.

         You may  read  and  copy  the  registration  statement,  including  the
attached exhibits, and any report,  statements or other information that we file
at the SEC's public reference  facilities located in Room 1024, Judiciary Plaza,
450 Fifth Street,  N.W.,  Washington D.C. 20549 and also at the regional offices
of Madison Street, Suite 1400, Chicago, Illinois 60661-2511. Please call the SEC
at  1-800-SEC-0330  for  further  information  on the  operation  of its  public
reference  facilities.  Our SEC  filings are also  available  to the public from
commercial   document   retrieval   services  and  at  the  SEC's  web  site  at
HTTP://WWW.SEC.GOV.

         If you are a shareholder,  you may request a copy of these filings,  at
no cost, by writing or telephoning us at the following  address:  15101 Red Hill
Ave., Ste 220, Tustin, CA 92780, phone number (949) 200-4000.

         For further  information  about us and our common  shares being sold in
this offering,  we refer you to the registration  statement and the accompanying
exhibits.  Statements contained in this prospectus concerning any document filed
as an exhibit are not necessarily  complete and we refer you to the copy of such
document filed as an exhibit to the registration statement.

                                       45

<PAGE>

                             ACCUPOLL HOLDING CORP.
                          INDEX TO FINANCIAL STATEMENTS

                                                                            Page
                                                                            ----
THREE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003

Unaudited Condensed Consolidated Balance Sheets at
September 30, 2004 (unaudited) and June 30, 2004.............................F-2

Unaudited Condensed Consolidated Statements of Operations for the three
month periods ended September 30, 2004 and 2003..............................F-3

Unaudited Condensed Consolidated Statements of Cash Flows for the three
month periods ended September 30, 2004 and 2003..............................F-4

Notes to Condensed Consolidated Financial Statements.........................F-5

YEARS ENDED JUNE 30, 2004, 2003 AND SINCE INCEPTION

Report of Independent Registered Public Accounting Firm.....................F-16

Consolidated balance sheets at June 30, 2004 and 2003.......................F-17

Consolidated statements of operations for the years ended
June 30, 2004 and 2003 and for the period from August 9, 2001
(Inception) through June 30, 2002...........................................F-18

Consolidated statements of stockholders' deficit for the years
ended June 30, 2004 and 2003 and for the period from August 9, 2001
(Inception) through June 30, 2002...........................................F-19

Consolidated statements of cash flows for the years ended
June 30, 2004 and 2003 and for the period from August 9, 2001
(Inception) through June 30, 2002...........................................F-22

Notes to Consolidated Financial Statements..................................F-23

                                      F-1

<PAGE>

                     ACCUPOLL HOLDING CORP. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                           ASSETS
                                                                                  (Unaudited)
                                                                                September 30, 2004      June 30, 2004
                                                                                ------------------     ---------------
CURRENT ASSETS
<S>                                                                              <C>                     <C>
      Cash                                                                        $    773,961           $    113,789
      Accounts receivable, net                                                         303,895                254,895
      Inventories                                                                      375,548                168,636
                                                                                  ------------           ------------
TOTAL CURRENT ASSETS                                                                 1,453,404                537,320

      Property and equipment, net                                                       14,174                 14,012
      Capitalized software development costs                                         1,855,532              2,544,207
      Other assets                                                                      26,765                 26,246
                                                                                  ------------           ------------

      TOTAL ASSETS                                                                $  3,349,875           $  3,121,785
                                                                                  ============           ============

                            LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
      Accounts payable and accrued expenses                                       $  1,693,461           $  1,817,284
      Related party payables                                                         1,214,070              1,228,070
      Unearned revenue                                                                  35,387                 74,628
      Convertible debt, net of discount                                              3,817,100              3,304,600
      Notes payable to related parties                                                  20,000                 30,000
      Put liability related to warrant issuance                                        163,760                163,760
      Liabilities subject to compromise                                                732,470                732,544
                                                                                  ------------           ------------

TOTAL CURRENT LIABILITIES                                                            7,676,248              7,350,886
                                                                                  ------------           ------------
       Equity instruments subject to rescission                                      6,300,000              6,200,000

                                                                                  ------------           ------------
COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' DEFICIT

      Convertible  Series A  preferred  stock,  $0.01 par value,
        80,000  shares authorized, zero shares issued or outstanding
       (liquidation preference of zero)
      Common stock, par value of $0.001, 600,000,000 shares authorized;
        183,849,710 and 158,482,171 shares issued and outstanding, respectively        183,850                158,482
      Additional paid in capital                                                    15,511,249             12,046,817
      Accumulated deficit                                                          (26,321,472)           (22,634,400)
                                                                                  ------------           ------------

TOTAL STOCKHOLDERS' DEFICIT                                                        (10,626,373)           (10,429,101)
                                                                                  ------------           ------------
      TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                                 $  3,349,875              3,121,785
                                                                                  ============           ============
</TABLE>

--------------------------------------------------------------------------------

         See notes to these condensed consolidated financial statements

                                      F-2

<PAGE>

                     ACCUPOLL HOLDING CORP. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
         FOR THE THREE MONTH PERIODS ENDED SEPTEMBER 30, 2004 AND 2003

                                             (Unaudited)
                                    September 30,    September 30,
                                         2004            2003
                                    (As Restated)    (As Restated)
                                    -------------    -------------
NET SALES                           $     494,244    $

COST OF SALES                             329,357
                                    -------------    -------------
GROSS PROFIT                              164,887

OPERATING EXPENSES
       General and administrative       1,315,155          915,290
       Professional fees                2,191,277           87,327
                                    -------------    -------------
                                        3,506,432        1,002,617
                                    -------------    -------------
OPERATING LOSS                         (3,341,545)      (1,002,617)

INTEREST EXPENSE, NET                     345,527          610,073
                                    -------------    -------------
NET LOSS                            $  (3,687,072)   $  (1,612,690)
                                    =============    =============
BASIC AND DILUTED LOSS
    PER COMMON SHARE                $       (0.02)   $       (0.02)
                                    =============    =============
WEIGHTED AVERAGE NUMBER OF COMMON
    SHARES OUTSTANDING                175,165,060      113,236,887
                                    =============    =============

         See notes to these condensed consolidated financial statements

                                      F-3

<PAGE>

                             ACCUPOLL HOLDING CORP.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
          FOR THE THREE MONTH PERIODS ENDED SEPTEMBER 30, 2004 AND 2003

<TABLE>
<CAPTION>
                                                                                  (Unaudited)
                                                                               2004           2003
                                                                                          (As Restated)
                                                                           -----------    ------------
<S>                                                                        <C>            <C>
Cash flows from operating activities:
     Net loss                                                              $(3,687,072)   $(1,612,690)
     Adjustments to reconcile net loss to net cash
       used in operating activities:
         Depreciation and amortization                                         693,874             --
         Amortization of estimated fair value of warrants
            granted and beneficial conversion feature in connection with
            the issuance of convertible notes payable                               --        110,033
         Amortization of beneficial conversion feature in connection
            with the issuance of subordinated convertible notes                     --        500,000
         Beneficial conversion feature expense                                 312,500             --
         Estimated fair value of options and warrants granted
            for services                                                            --        168,000
         Vesting of previously issued stock options                                 --        136,545
         Estimated fair value of common stock issued
            for services                                                            --         32,930
         Options and warrants granted for services                           1,462,900             --
         Changes in operating assets and liabilities:
            Accounts receivable                                                (49,000)            --
            Inventories                                                         68,863             --
            Prepaid expenses and other assets                                 (276,294)       (37,765)
            Accounts payable and accrued expenses                             (123,823)       225,971
            Related party payables                                             (14,000)        61,490
            Deferred income                                                    (39,241)            --
                                                                           -----------    -----------
     Net cash used in operating activities                                  (1,651,293)      (415,486)
                                                                           -----------    -----------
Cash flows from investing activities:
     Increase in deferred acquisition costs                                         --        (81,000)
     Increase in capitalized software development costs                         (5,361)      (360,330)
                                                                           -----------    -----------

     Net cash used in investing activities                                      (5,361)      (441,330)
                                                                           -----------    -----------
Cash flows from financing activities:

     Proceeds from the issuance of notes payable to related parties                 --         50,000
     Principal payments on notes payable to related parties                    (10,000)            --
     Proceeds from issuance of convertible subordinated debt                        --        500,000
     Proceeds from issuance of convertible notes payable                       512,500        200,000

     Proceeds from the issuance of common stock, net of commissions          1,774,896         25,000
     Proceeds from issuance of common stock upon exercise of warrants,
       net of commissions                                                       39,430        152,786
                                                                           -----------    -----------
     Net cash provided by financing activities                               2,316,826        927,786
                                                                           -----------    -----------

Net increase in cash                                                           660,172         70,970
Cash at beginning of period                                                    113,789             --
                                                                           -----------    -----------
Cash at end of period                                                      $   773,961    $    70,970
                                                                           ===========    ===========
</TABLE>

Supplemental disclosure of non-cash financing and operating activities:

See accompanying notes to the condensed  consolidated  financial  statements for
additional information relating to non-cash investing and financing activities.

--------------------------------------------------------------------------------

                                      F-4
<PAGE>

                             ACCUPOLL HOLDING CORP.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (UNAUDITED)

NOTE 1: BASIS OF REPORTING

The accompanying  condensed consolidated financial statements have been prepared
in accordance with the Securities and Exchange  Commission's ("SEC") regulations
for interim financial information.  Accordingly,  they do not include all of the
disclosures  required by accounting  principles generally accepted in the United
States of America  ("GAAP")  for a complete  set of  financial  statements.  The
unaudited condensed consolidated financial statements should, therefore, be read
in conjunction with the consolidated  financial  statements and notes thereto in
the Form 10-K/A  annual  report of the Company,  as amended,  for the year ended
June 30, 2004. In the opinion of management, all adjustments (which consist only
of  normal  and  recurring   adjustments)   considered   necessary  for  a  fair
presentation  have been included.  The results of operations for the three-month
period ended  September 30, 2004 are not  necessarily  indicative of the results
that may be expected for the entire fiscal year.

GOING CONCERN CONSIDERATIONS

The accompanying  condensed  consolidated  financial statements are presented on
the basis that the Company will continue as a going  concern which  contemplates
the  realization of assets and the  satisfaction  of liabilities in the ordinary
course of business  over a reasonable  length of time.  The Company has incurred
significant  operating  losses  and has used  cash in its  operations  since its
inception.  Most of this cash was  expended in the  development  of software and
systems infrastructure and in organization development and staffing. Other funds
were invested in the development and protection of  intellectual  property,  and
financial investment advisory fees and commissions related to fund raising.

At September  30, 2004,  the Company has an  accumulated  deficit  approximating
$26,321,000. Further, the Company has not generated any revenues from its Voting
System (see "Nature of Operations" below) operations,  and there is no assurance
of any future  revenues.  Consequently,  the Company  will  require  substantial
additional  funding  for  continuing  the  development,   obtaining   regulatory
approval,  and commercialization of its product.  There is no assurance that the
Company will be able to obtain  sufficient  additional funds when needed or that
such funds,  if  available,  will be  obtainable  on terms  satisfactory  to the
Company.

Management has taken actions to address these matters, which include:

o        Retention of experienced management personnel with particular skills in
         the commercialization of such products;

o        Attainment  of  technology  to develop  such  products  and  additional
         products; and

o        Raising  additional  funds  through  the  sale  of debt  and/or  equity
         securities.

Federal, State and various foreign government regulations govern the sale of the
Company's products.  There can be no assurance that the Company will receive the
regulatory approval required to market its proposed products.

The Company has incurred losses through September 30, 2004, had negative working
capital  at  that  date  of  approximately  $4.3  million,  and  has a  lack  of
operational  history which,  among other factors,  raise substantial doubt about
its  ability  to  continue  as a going  concern.  The  Company  intends  to fund
operations through sales of the Voting System, but there is no commitment by any
entities  for the purchase of any of the  proposed  products.  In the absence of
significant sales and profits, the Company may seek to raise additional funds to
meet its working  capital  requirements  through  debt and/or  equity  financing
arrangements  (see Notes 8 and 9). Management  believes that such  arrangements,
combined  with  the net  proceeds  from  planned  capital  transactions  will be
sufficient to fund the Company's capital expenditures, working capital needs and
other cash  requirements  for the year  ending  June 30,  2005.  The  successful
outcome of future  activities cannot be determined at this time, and there is no
assurance that, if achieved,  the Company will have sufficient  funds to execute
its intended business plan or generate positive operating results.

These circumstances,  combined with the potential liability discussed in Note 2,
raise  substantial  doubt  about the  Company's  ability to  continue as a going
concern. The accompanying  consolidated  financial statements do not include any
adjustments that might result from the outcome of this uncertainty.

                                      F-5

<PAGE>

PRINCIPLES OF CONSOLIDATION

The  accompanying   condensed  consolidated  financial  statements  include  the
accounts of AccuPoll  Holding Corp. (a Nevada  Corporation) and its wholly owned
subsidiaries, AccuPoll, Inc. and Z Prompt, Inc. ("Z Prompt"). In accordance with
Financial Accounting Standards Board ("FASB") Interpretation ("FIN") No. 46, the
accounts of Web Tools International, Inc. ("WTI") have not been consolidated for
the three months ended September 30, 2004 (see "De-Consolidation of WTI" below).
All significant  inter-company balances and transactions have been eliminated in
consolidation.

Except where the context requires otherwise, the entities named in the preceding
paragraph are hereinafter collectively referred to as the "Company."

As discussed in Note 3, Z Prompt filed for bankruptcy  protection in March 2004.
The accompanying financial statements do not include any adjustments that may be
required in connection with restructuring Z Prompt, as it proposes to reorganize
under Chapter 11 of the  Bankruptcy  Code. In addition,  as described  elsewhere
herein,  the Company and certain of its officers and principal  stockholders are
presently  involved in civil  litigation  with certain former  stockholders  and
officers of Z prompt.  Management has determined that it would not be meaningful
to de-consolidate  the accounts of Z prompt at this time because the Company (a)
has a substantial  negative investment in Z prompt as of September 30, 2004, and
(b) expects to re-gain control of this subsidiary  based on the expectation that
Z prompt will be able to  negotiate a confirmed  reorganization  plan and emerge
from  bankruptcy  by  approximately  March  of 2005.  See Note 3 for  additional
information regarding Z prompt. Accordingly,  the Company has not deconsolidated
the  accounts  of Z Prompt in its  September  30,  2004  consolidated  financial
statements.

NATURE OF OPERATIONS

AccuPoll,  Inc.  is  engaged  in the  design  and  development  of an  intuitive
touch-screen  interface  (the "Voting  System")  that  provides a polling  place
electronic voting solution that is confidential,  reliable, accurate, immediate,
secure and  auditable.  While  maintaining  and  preserving  the  current  voter
experience,  the Company adds the ability to  accurately  capture in  electronic
form a voter's true intent, while simultaneously  preserving the legally binding
vote - the  official  paper  ballot.  The  Voting  System  has  the  ability  to
simultaneously  produce two different  electronic audit trails (recorded on both
the polling place administrative work station and the local voting station),  in
addition to generating a printed-paper  ballot.  The Company completed a reverse
merger with a publicly traded company in May 2002 and its common stock is quoted
on the Over-The-Counter Bulletin Board under the symbol "ACUP."

Z Prompt provides a number of standard service  programs,  as well as customized
programs,  to fit the special  needs of its  customers.  Z Prompt,  Inc.  offers
services such as on-site hardware service,  installation and training, inventory
management and preventive maintenance.

WTI  was   incorporated   in   1996   and  is   owned   and   operated   by  two
stockholders/officers  of  AccuPoll  Holding  Corp.  WTI is in the  business  of
software   engineering  in  various  computer  languages  with  an  emphasis  on
Linux/Apache, Sun Solaris and Microsoft NT/Win2K platforms.

                                      F-6
<PAGE>

STOCK-BASED EMPLOYEE COMPENSATION

As of September  30, 2004,  the Company has not adopted a  stock-based  employee
compensation  plan.  The  Company  accounts  for  stock-based   compensation  to
employees  under  the  recognition  and  measurement  principles  of  Accounting
Principles  Board  ("APB")  Opinion  No.  25,  "Accounting  for Stock  Issued to
Employees,"  and  related  Interpretations.   The  Company  did  not  incur  any
stock-based employee  compensation cost for the three months ended September 30,
2004 or 2003 under APB  Opinion  No. 25. The  following  table  illustrates  the
pro-forma  effect  on net  loss and loss per  common  share if the  Company  had
applied  the  fair  value  recognition  provisions  of  Statement  of  Financial
Accounting   Standards   ("SFAS")   No.   123,   "Accounting   for   Stock-Based
Compensation," to stock-based employee compensation for the indicated periods.

                                            Three Months Ended
                                               September 30,
                                      ---------------------------
                                            2004         2003
                                      (As Restated)  (As Restated)
                                      -------------  ------------
Net loss available to common           $(3,687,072)   $(1,751,690)
stockholders, as reported *
Pro forma compensation expense            (181,710)     (355,000)
                                      -------------  ------------
Pro forma net loss available to
common stockholders                    $(3,868,782)   $(2,106,690)
                                      =============  ============
Loss per common share, as reported
   Basic and diluted                   $     (0.02)   $     (0.02)
                                      =============  ============
Loss per common share, pro forma
   Basic and diluted                   $     (0.02)   $     (0.02)
                                      =============  ============

* These amounts include interest related to certain equity  instruments  subject
to rescission (see Note 2).

INVENTORIES

Inventories  are stated at the lower of cost or  estimated  market  and  consist
entirely of finished goods.  Cost is determined on a weighted average basis that
approximates the first-in,  first-out method.  Market is estimated by comparison
with recent  purchases or net realizable  value.  Such net  realizable  value is
based on management's  forecast for sales of the Company's  products or services
in  the  ensuing  years.   The  industry  in  which  the  Company   operates  is
characterized  by  technological  advancement and change.  Should demand for the
Company's products prove to be significantly less than anticipated, the ultimate
realizable value of the Company's  inventories could be substantially  less than
the amount shown in the accompanying condensed consolidated balance sheets.

REVENUE RECOGNITION

The Company  records  sales when goods are  shipped to the  customer or upon the
completion  of the service.  Amounts  received  prior to the  completion  of the
earning process,  such as maintenance contracts paid in advance, are included in
deferred revenues in the accompanying condensed consolidated balance sheets.

The SEC issued Staff Accounting Bulletin 104 ("SAB 104"), "REVENUE RECOGNITION,"
which  outlines the basic  criteria  that must be met to  recognize  revenue and
provides  guidance for  presentation of revenue and for  disclosures  related to
revenue  recognition  policies  in  financial  statements  filed  with  the SEC.
Management  believes that the Company's  revenue  recognition  accounting policy
conforms to SAB 104.

                                      F-7

<PAGE>

IMPAIRMENT OF LONG LIVED-ASSETS

The Company  periodically  evaluates the carrying value of its long-lived assets
under the provisions of SFAS No. 144, "Accounting for the Impairment or Disposal
of Long-Lived Assets." SFAS No. 144 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  Effects  of the  Disposal  of a Segment of a
Business,  and  Extraordinary,  Unusual and  Infrequently  Occurring  Events and
Transactions,"  for the  disposal  of a segment  of a  business  (as  previously
defined in that Opinion).  SFAS No. 144 also amends Accounting Research Bulletin
("ARB") No. 51, "Consolidated  Financial Statements," to eliminate the exception
to consolidation of a subsidiary when control is likely to be temporary.

SFAS No. 144 requires impairment losses to be recorded on long-lived assets used
in  operations,  including  amortizable  intangible  assets when  indicators  of
impairment are present. Indicators of impairment include an economic downturn or
a change in the  assessment  of future  operations.  In the event a condition is
identified  that may indicate an  impairment  issue,  an assessment is performed
using a variety of methodologies, including analysis of undiscounted future cash
flows,  estimates of sales proceeds and independent  appraisals.  If such assets
are impaired, the impairment to be recognized is measured by the amount by which
the carrying amount of the asset exceeds the estimated fair value of the assets.
Assets to be disposed  of are  reported  at the lower of the  carrying  value or
estimated fair value, less cost to sell.

LOSS PER COMMON SHARE

The following is a  reconciliation  of the  numerators and  denominators  of the
basic and diluted loss per common share computations for the three-month periods
ended September 30, 2004 and 2003:

                                           2004           2003
                                                     (As Restated)
                                      --------------  ------------
Net loss                               $ (3,687,072)  $(1,612,690)
Interest related to equity
instruments subject to rescission          (100,000)     (139,000)
                                      --------------  ------------
Dilutive net loss available to
common stockholders                    $ (3,787,082)  $(1,751,690)
                                      ==============  ============
Shares used to compute loss per
common share                            175,165,060   113,236,887
                                      ==============  ============
Basic and diluted loss per common
share:                                 $      (0.02)  $     (0.02)
                                      ==============  ============

                                      F-8

<PAGE>

DE-CONSOLIDATION OF WTI

In January 2003, the FASB issued FIN No. 46, "Consolidation of Variable Interest
Entities, an Interpretation of ARB 51." The primary objectives of FIN No. 46 are
to provide  guidance  on the  identification  of entities  for which  control is
achieved through means other than voting rights (variable interest entities,  or
"VIEs"),  and  how to  determine  when  and  which  business  enterprise  should
consolidate the VIE. This new model for  consolidation  applies to an entity for
which  either:  (a) the equity  investors  do not have a  controlling  financial
interest;  or (b) the equity  investment at risk is insufficient to finance that
entity's activities without receiving additional  subordinated financial support
from other  parties.  In  addition,  FIN No. 46  requires  that both the primary
beneficiary and all other enterprises with a significant  variable interest in a
VIE make  additional  disclosures.  As amended in December  2003,  the effective
dates  of FIN No.  46 ("FIN  46-R")  for the  Company  are as  follows:  (a) For
interests in special-purpose entities: the first period ended after December 15,
2003;  and (b) For all other types of VIEs:  the first  period ended after March
15, 2004.

As disclosed in the notes to the Company's June 30, 2004 consolidated  financial
statements  previously filed with the SEC in amended Form 10-K/A, the Company is
associated with WTI through common ownership;  however,  even though the Company
was virtually WTI's only customer for software development services,  the master
services agreement with the Company expired March 31, 2004. Since that date, the
Company has not used the  services of WTI  because the  software  for the Voting
System is now substantially  complete;  any additional computer programming that
may be necessary will be provided by Company  employees (some of whom are former
WTI  employees).  At this time,  WTI is virtually a dormant entity with just two
minor customers and only a few employees.  Although the Company's  September 30,
2004 payable to WTI is a substantial amount (see note 10), there is no intent to
pay this liability in the foreseeable  future.  Given its minimal  operations at
this time, management believes that WTI is no longer dependent for its continued
existence upon additional subordinated financial support from the Company or its
controlling stockholders.  For these reasons,  management has concluded that the
Company  is  no  longer  the  primary  beneficiary  of  WTI .  Accordingly,  the
accompanying financial statements do not include the accounts of WTI.

SEGMENT INFORMATION

SFAS 131, "Disclosures about Segments of an Enterprise and Related Information,"
changed the way public  companies  report  information  about  segments of their
business  in their  annual  financial  statements  and  requires  them to report
selected segment information in their quarterly reports issued to shareholders.

It also  requires  entity-wide  disclosures  about the  products and services an
entity provides,  the foreign countries in which it holds significant assets and
its major customers. At September 30, 2004 and 2003, the Company operates in one
segment, as disclosed in the accompanying condensed  consolidated  statements of
operations.

RECLASSIFICATIONS

Certain  reclassifications  have  been  made to the  prior  period  consolidated
financial statements to conform to the current year presentation.

NOTE 2: EQUITY INSTRUMENTS SUBJECT TO RESCISSION

The Company may be subject to possible claims for rescission with respect to the
sale or other issuances of certain common stock, options and warrants.

The Company has offered and sold a substantial  number of shares of common stock
and warrants and options to purchase common stock without registration under the
Securities  Act of 1933, as amended,  (the  "Securities  Act") or  qualification
under  state  securities  laws.  If any offer or sale were not exempt  from,  or
otherwise  not subject  to,  federal and state  registration  and  qualification
requirements, the purchaser would have a number of remedies, including the right
to  rescind  the  purchase.  The  Securities  Act  requires  that any  claim for
rescission  be brought  within one year of the  violation.  The Company has sold
approximately  9,768,000  shares of common  stock and  warrants  and  options to
purchase  shares  of  common  stock  in the  United  States  within  one year of
September 30, 2004. The time periods within which claims for rescission  must be
brought under state  securities  laws vary and may be two years or more from the
date of the  violation.  The Company  sold  approximately  14 million  shares of
common stock and warrants and options to purchase  shares of common stock in the
United States within two years of September 30, 2004.

                                      F-9

<PAGE>

Management is unable to determine at this time whether any claim for  rescission
may be filed against the Company; however, there can be no assurance that claims
will not be asserted.  In addition,  regulatory  agencies  could launch a formal
investigation and/or institute an enforcement proceeding against the Company.

The Company  accounts for common stock and other equity  instruments that may be
subject to rescission claims as a put liability based on estimated fair value in
accordance  with  the  SEC's  promulgated   accounting  rules  and  interpretive
releases.  Since equity instruments  subject to rescission are redeemable at the
holder's  option or upon the occurrence of an uncertain  event not solely within
the Company's control, such equity instruments are outside the scope of SFAS No.
150 and its related  interpretations.  Under the SEC's  interpretation  of GAAP,
reporting such claims outside of stockholders' equity (as "mezzanine equity") is
required,  regardless  of how  remote the  redemption  event may be.  Thus,  the
Company has reported  approximately  $6.3 million as  "mezzanine  equity" in the
accompanying September 30, 2004 condensed consolidated balance sheet.

As previously  reported,  the Company's  prior year  financial  statements  were
restated.  In addition,  all  financial  information  included in these notes to
consolidated  financial statements for the first quarter of fiscal 2004 has been
adjusted.

NOTE 3: BANKRUPTCY FILING BY WHOLLY OWNED SUBSIDIARY

On March 23, 2004 (the  "Petition  Date"),  Z Prompt (or the  "Debtor")  filed a
voluntary  petition for relief (the  "Chapter 11 Case") under  Chapter 11 of the
United  States  Bankruptcy  Code (the  "Bankruptcy  Code") in the United  States
Bankruptcy  Court  for the  Central  District  of  California  (the  "Bankruptcy
Court").  Since the Petition  Date, Z Prompt has  continued to conduct  business
activities as a debtor-in-possession under the Bankruptcy Code.

The  accompanying  consolidated  financial  statements  have  been  prepared  in
accordance  with GAAP  applicable to a going concern,  which assumes that assets
will be realized and  liabilities  will be discharged in the ordinary  course of
business.  As a result of the  Chapter 11 Case,  the  realization  of Z Prompt's
assets and the liquidation of its liabilities are subject to uncertainty. In the
Chapter 11 Case, a  substantial  portion of the Debtor's  liabilities  as of the
Petition  Date is  subject  to  compromise  or other  treatment  under a plan of
reorganization.  Generally,  actions to enforce or otherwise effect repayment of
all  pre-Chapter 11 liabilities (as well as any pending  litigation  against the
Debtor, absent a stipulation to the contrary) are stayed while Z Prompt operates
as a  debtor-in-possession  during bankruptcy  proceedings.  Schedules have been
filed by the Debtor with the  Bankruptcy  Court  setting  forth the  liabilities
(approximately $ 1 million) and assets of Z Prompt as of the Petition Date based
on its unaudited  accounting  records.  Differences between amounts reflected in
such  schedules  and claims filed by creditors  will be  investigated,  and will
either be amicably resolved or adjudicated by the Bankruptcy Court. The ultimate
amount and settlement terms of such liabilities are not presently determinable.

Financial  accounting  and reporting  during a Chapter 11 case are prescribed by
Statement   of  Position   No.   90-7,   FINANCIAL   REPORTING  BY  ENTITIES  IN
REORGANIZATION  UNDER THE BANKRUPTCY CODE ("SOP 90-7"). For financial  reporting
purposes,  Z Prompt's  pre-petition  liabilities and  obligations,  which may be
subject to  settlement  or otherwise  dependent on the outcome of the Chapter 11
case, have been segregated and classified as "liabilities subject to compromise"
in the accompanying  September 30, 2004 condensed consolidated balance sheet. In
addition,  the Company will report all significant Z Prompt  transactions (other
than   interest   expense)   directly   related  to  the   Chapter  11  Case  as
"reorganization   items"  in  its  future  statements  of  operations.   Certain
additional disclosures including (a) claims not subject to reasonable estimation
of the amount to be allowed and (b) any significant  difference between reported
interest  expense  and stated  contractual  interest  will be provided in future
financial   statements   (as  required  by  SOP  90-7)  when  such  amounts  are
determinable and/or when the related transactions occur.

Management continues to conduct business activities under the supervision of the
Bankruptcy  Court  and,  among  other  things,  the  Debtor is granted a 120-day
exclusive  right to propose a plan of  reorganization  which must be approved by
the creditors  and confirmed by the  Bankruptcy  Court.  In accordance  with the
Bankruptcy Code, an automatic stay provides that creditors of Z Prompt and other
parties in interest are prevented from seeking repayment of pre-petition  debts.
Additionally, unless otherwise approved by the Bankruptcy Court, the Debtor must
refrain from paying any pre-petition indebtedness.

                                      F-10

<PAGE>

Z  Prompt's  bankruptcy  filing  resulted  in  non-payment  of  the  April  2004
installment  owed to a secured  creditor  under a line of credit  agreement (see
Note 5). Because of this event,  such  indebtedness is in default and is now due
and payable.  The repayment,  if any, of such  indebtedness will be a subject of
the reorganization  plan. An important element in successfully  reorganizing the
Debtor will be the ability to restructure certain liabilities in order to reduce
indebtedness and provide funding for operations.

On  April  20,  2004,  the  Bankruptcy  Court  approved  a  debtor-in-possession
financing  arrangement  whereby Z Prompt is  permitted  to  obtain  credit  from
AeroFund  Financial,  Inc.  of no more than  $500,000  through  the sale  and/or
factoring of its  post-petition  accounts  receivable;  this credit  facility is
collateralized by a security interest in such accounts receivable.

Although  legal fees and other  administrative  expenses  to complete Z Prompt's
bankruptcy  proceedings  may  be  significant,   they  are  not  susceptible  to
reasonable estimation at this time; accordingly,  the accompanying September 30,
2004 condensed  consolidated  financial  statements do not include any provision
for such costs not yet incurred by the Debtor.

Z Prompt  could  decide to reject  some or all of its lease  obligations  in the
Chapter 11 Case.  This action may result in lease  rejection  claims pursuant to
the Bankruptcy Code; any such claims would then be adjudicated by the Bankruptcy
Court. No expenses for any possible lease  rejection  claims have been reflected
in the Company's September 30, 2004 condensed consolidated financial statements.

As part of the process of attempting to reorganize, Z Prompt is pursuing various
financing alternatives that may be available, although there can be no assurance
that the Debtor will be able to  successfully  implement any such  alternatives.
Though Z Prompt  intends to make  efforts to  increase  its  revenues to improve
operations,  it is possible that losses will continue for the foreseeable future
and the Debtor will  require  additional  funding and  financial  support from a
third party and/or its parent  company.  There can be no assurance that any such
additional  financing will be available on acceptable terms, that such funds (if
available) would enable Z Prompt to continue operating,  or that the Debtor will
be  successful in increasing  its revenues.  In addition,  there is no assurance
that the creditors and the Bankruptcy Court will approve a  reorganization  plan
that will allow Z Prompt to survive.

                                      F-11

<PAGE>

Condensed  balance  sheet  information  of Z prompt as of September 30, 2004 and
results of operations  for the quarter ended is presented  below.  No comparable
information  is presented for the three months ended  September 30, 2003 because
the  acquisition  of Z Prompt was not recorded  for  accounting  purposes  until
November 2003.

                                  Z PROMPT INC.
                                  BALANCE SHEET

             ASSETS                              September 30, 2004
                                                    (unaudited)

CURRENT ASSETS

      Cash                                       $           48,675
      Accounts receivable, net                              296,699
      Inventories                                            44,723
                                                 ------------------
                                                            390,097
OTHER, net                                                    7,950
                                                 ------------------
      TOTAL ASSETS                               $          398,047
                                                 ==================

LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
      Accounts payable and accrued expenses      $          216,865
      Loan from parent company                              823,380
      Deferred revenues                                      35,387
      Liabilities subject to compromise                     732,470
                                                 ------------------
      TOTAL LIABILITIES                                   1,808,102
                                                 ------------------
STOCKHOLDERS' DEFICIT                                    (1,410,055)
                                                 ------------------
TOTAL LIABILITIES AND DEFICIT                    $          398,047
                                                 ==================

                                      F-12

<PAGE>

                                  Z PROMPT INC.
                       STATEMENT OF OPERATIONS (UNAUDITED)
                      THREE MONTHS ENDED SEPTEMBER 30, 2004

NET SALES                         $   494,244
COST OF SALES                         329,357
                                  -----------
GROSS PROFIT                          164,187

EXPENSES

 General and administrative            99,872
 Salaries and related                  54,967
 Interest                               3,128
                                  -----------
                                      157,697
                                  -----------
PRETAX INCOME                     $     7,190
                                  ===========

The September 30, 2004 balances of Z Prompt's liabilities that became subject to
compromise on March 23, 2004 are as follows:

Accounts payable and accrued expenses                          $     336,470
Line of credit payable to a financial institution (Note 5)           225,000
Notes payables to related parties                                    171,000
                                                               -------------
             Total                                             $     732,470
                                                               =============

NOTE 4: CAPITALIZED SOFTWARE DEVELOPMENT COSTS

In accordance with SFAS No. 86 "Accounting for the Costs of Computer Software to
be Sold, Leased, or Otherwise  Marketed," the Company  capitalizes certain costs
related to the  development  of new  software  products  or the  enhancement  of
existing software products for sale or license. These costs are capitalized from
the  point in time  that  technological  feasibility  has been  established,  as
evidenced by a working model or detailed  working-program design to the point in
time that the product is available for general release to customers. Capitalized
software  development  costs are  amortized  on a  straight-line  basis over the
three-year  estimated  economic life of the products,  beginning (as applicable)
with  the  general  product  release  to  customers  or when the  Voting  System
qualified  under  certain  federal  standards.  Research and  development  costs
incurred  prior to  establishing  technological  feasibility  and costs incurred
subsequent  to the events  described  in the  preceding  sentence are charged to
expense as incurred.

The Company periodically evaluates whether events or circumstances have occurred
that  indicate  that the  remaining  useful  lives of the  capitalized  software
development costs should be revised or that the remaining balance of such assets
may not be  recoverable.  At September  30, 2004,  management  believes  that no
revisions to the remaining  useful lives or write-down of  capitalized  software
development  costs are required.  The Company began  amortizing its  capitalized
software development costs in April 2004, following the March 2004 qualification
of its Voting System as complying with certain federal voting system  standards;
at September 30, 2004, accumulated amortization approximated $925,000.

                                      F-13

<PAGE>

NOTE 5: LINE OF CREDIT

The  Company  has a  revolving  line of credit  agreement  (the  "Line")  with a
financial  institution  that matured in August 2004, as amended.  The Line bears
interest  at 5% per annum.  A  shareholder  of the  Company who is also a former
majority  shareholder  of Z Prompt  guaranteed  the Line.  The terms of the Line
provided for borrowings of up to $280,000.  At September 30, 2004, the Company's
outstanding  borrowings  totaled  $225,000,  which are  included in  liabilities
subject  to  compromise  on  the  accompanying   September  30,  2004  condensed
consolidated balance sheet.

NOTE 6: CONVERTIBLE DEBT

On July 2nd 2004, through a private placement  memorandum,  the Company issued a
$625,000 convertible debenture.  The "Convertible Note" bears interest at 8% per
annum On September 08, 2004,  Accupoll  Inc.  repaid  $312,500.  The balance was
converted into 3,125,000  shares of common stock,  at a price value of $0.15 per
share in October 2004.

The convertible  feature of this note payable  provides for a rate of conversion
that is below  market  value of the  common  stock.  This  feature  is  normally
characterized as a beneficial  conversion feature ("BCF").  Pursuant to Emerging
Issues  Task Force  ("EITF")  Issue No.  98-5  ("EITF  98-5"),  "Accounting  For
Convertible  Securities  with  Beneficial  Conversion  Features or  Contingently
Adjustable  Conversion  Ratio," and EITF Issue No. 00-27,  "Application  of EITF
Issue No. 98-5 To Certain  Convertible  Instruments,"  the Company has estimated
the fair value of such BCF to approximate $312,500 which has been amortized into
interest expense for the quarter ended September 30, 2004.

NOTE 7: OTHER COMMITMENTS AND CONTINGENCIES

In November 2002, the Company entered into a Location Incentives  Agreement (the
"Agreement")  with the Amarillo  Economic  Development  Corporation  ("AEDC") to
establish  the  Company's  customer  service  center and voting  machine  repair
operations in Amarillo,  Texas.  According to the terms of the  Agreement,  AEDC
will pay the  Company  $250,000  upon the  Company's  execution  of a lease  for
facilities in Amarillo.  The funds  advanced  under the Agreement are to be used
solely for the  operations  in  Amarillo.  If the Company  does not meet certain
minimum employment  requirements,  as defined,  it will be required to repay all
amounts advanced. In connection with the Agreement, the Company granted warrants
to  purchase  250,000  shares of the  Company's  restricted  common  stock at an
exercise price of $1.04 per share,  valued at  approximately  $205,000 (based on
the Black-Scholes  pricing model), which was expensed upon issuance.  In January
2003, the Company received the $250,000 and has included such amount in accounts
payable and accrued expenses in the accompanying  condensed consolidated balance
sheets,  as the  Company  has yet to  fulfill  its  obligations  related  to the
Agreement.

NOTE 8: STOCKHOLDERS' EQUITY (DEFICIT)

COMMON STOCK

         Holders of the company  common stock:  (i) have equal ratable rights to
dividends from funds legally available therefor, when, as and if declared by the
Board of  Directors;  (ii) are  entitled  to share  ratably in all of our assets
available for  distribution to  stockholders  upon  liquidation,  dissolution or
winding  up of our  affairs;  (iii)  do not  have  preemptive,  subscription  or
conversion  rights,  nor are there any  redemption  or sinking  fund  provisions
applicable  thereto;  and (iv) are entitled to one vote per share on all matters
on which  stockholders  may vote at all shareholder  meetings.  The common stock
does not have  cumulative  voting  rights,  which means that the holders of more
than fifty  percent of the common stock  voting for  election of  directors  can
elect one hundred percent of our directors if they choose to do so.

PREFERRED STOCK

         The  Company's  Articles of  Incorporation  authorize  80,000 shares of
preferred  stock,  $.01 par value per share.  The Company's  Board of Directors,
without  any action by  stockholders,  is  authorized  to divide the  authorized
shares  of   preferred   stock  into  series  and  to   designate   the  rights,
qualifications,  preferences,  limitations and terms of the shares of any series
of preferred stock,  including but not limited to dividend,  redemption,  voting
rights  and  preferences.  The  ability of the  company  Board of  Directors  to
designate  and issue such shares  could  impede or deter an  unsolicited  tender
offer  or  takeover  proposal  and the  issuance  of  additional  shares  having
preferential  rights could affect adversely the voting power and other rights of
holders of the common stock.

         The Company have not filed a certificate of designation with respect to
any series of preferred stock.  During the year ended June 30, 2003, the Company
agreed  to  issue a total of  71,529  shares  of  Series  A  Preferred  Stock as
collateral for secured notes. The parties have subsequently agreed to cancel the
transaction.  On December 31, 2003,  we agreed to issue 8,471 shares

                                      F-14
<PAGE>

of Series A  Preferred  Stock to two  stockholders  of record  in  exchange  for
3,325,000 shares of common stock of Material Technologies,  Inc. On May 7, 2004,
the Company  rescinded this transaction.  Accordingly,  the Company currently do
not have any shares of preferred stock issued or outstanding.

JULY 2004 PRIVATE PLACEMENT

         In July 2004,  the company  completed a private  placement  transaction
with  four  accredited  investors,  pursuant  to which the  company  sold (1) an
aggregate  of  $625,000  principal  amount 8%  convertible  debentures,  and (2)
warrants to  purchase  312,500  shares of our common  stock.  From this  private
placement  the company  received  gross  proceeds of $625,000.  On September 13,
2004,  the  company  pre-paid  $312,500  of  the  principal  amount  of  the  8%
convertible debentures and the remaining $312,500 principal amount was converted
into  3,125,000  shares of our common stock.  Also on September 13, 2004, all of
the warrants were exercised at a price of $0.15 per share into 312,500 shares of
the common stock. The issuance of the 8% convertible  debentures,  the warrants,
and  the  shares  of  common  stock  upon  conversion  and  exercise  of  the 8%
convertible  debentures and warrants was exempt from registration under Rule 506
of Regulation D and/or  Section 4(2) of the  Securities Act of 1933, as amended.
The company is  registering  in this offering  3,437,500  shares of common stock
owned by the investors in this private placement from the conversion of their 8%
convertible debentures and the exercise of common stock purchase warrants.  J.P.
Turner & Company,  LLC acted as placement  agent for this  transaction.  For its
services as placement  agent,  the company issued J.P.  Turner & Company,  LLC a
warrant to purchase 520,833 shares of common stock,  exercisable for three years
at an exercise price of $0.12 per share. The company is also registering in this
offering  520,833  shares of common stock  issuable upon exercise of the warrant
held by J.P. Turner & Company, LLC.

SEPTEMBER  2004 PRIVATE PLACEMENT

         On  September  13,  2004,  the company  completed  a private  placement
transaction with eleven accredited investors, pursuant to which the company sold
an aggregate of 3,666,447  shares of common stock,  1,833,227 Series A Warrants,
1,833,227  Series B  Warrants  and  1,833,227  Series  C  Warrants  (the  "First
Closing").  The company received gross proceeds  approximating  $1,650,000.  For
each two shares of common stock, the company issued investors one A Warrant, one
B Warrant and one C Warrant.  Each two shares and three  warrants were sold at a
total price of $0.90. The private placement was exempt from  registration  under
Rule 506 of Regulation D of the Securities Act of 1933, as amended.

         The Company agreed to file with the Securities and Exchange  Commission
not later than 30 days  following  the closing  date,  and cause to be effective
within 120 days after the closing  date,  a  registration  statement in order to
register  the  shares of common  stock  issued to the  investors  and the shares
underlying  the warrants,  including  warrant  shares  issuable upon exercise of
warrants  issued to the  placement  agent  (the  "Registration  Statement").  In
addition,  on one  occasion,  for a period  commencing  91 day after the closing
date, but not later than two years after the closing date,  upon written request
of the holders of more than 50% of the shares and warrant shares actually issued
upon  exercise  of  warrants,  the  Company is  required  to prepare  and file a
Registration  Statement.  The A  Warrants  expire  150  days  from  the date the
Registration  Statement  is declared  effective  by the  Securites  and Exchange
Commission and are  exercisable at $0.12 per share.  The B Warrants  expire four
years after the date the  Registration  Statement  is declred  effective  by the
Securities and Exchange Commission and are exercisable at $0.15 per share. The C
warrants  expire  three  years  after  the date the  Registration  Statement  is
declared effective by the Securities and Exchange Commission and are exercisable
at $0.50 per share.

         The Company may call the  warrants  beginning 30 trading days after the
effective date of the  Registration  Statement and ending 30 trading days before
the expiration of the warrants. A call notice may be given by AccuPoll for the A
Warrants  only within five trading days after the common stock has had a closing
price as reported for the principal market of $0.24 or higher for 15 consecutive
trading  days.  A call notice may be given by AccuPoll  for the B Warrants  only
within  five  trading  days  after the common  stock has had a closing  price as

                                      F-15
<PAGE>

reported for the principal market of $0.30 or higher for 15 consecutive  trading
days.  A call notice may be given by the Company for the C Warrants  only within
five trading days after the common stock has had a closing price as reported for
the principal market of $1.00 or higher for 15 consecutive trading days.

         The shares of common  stock sold and the common  stock  underlying  the
warrants issued to the investors and the placement agent described above in Note
8 and in note 9  below  are  restricted  stock  as  defined  in Rule  144 of the
Securities Act of 1933 (as amended) until the Registration Statement is declared
effective by the Securities and Exchange Commission.

         On November 4, 2004, certain of the terms of the September 2004 Private
Placement were amended with a second round (See Note 9 below).

NOTE 9: SUBSEQUENT EVENTS

NOVEMBER 2004 PRIVATE PLACEMENT

         On  November  4,  2004,  the  Company  completed  a  private  placement
transaction  with the same investors  from the First Closing,  pursuant to which
the company sold an aggregate of  6,050,000  shares of common  stock,  3,025,000
Series A Warrants,  3,025,000  Series B Warrants and 3,025,000 Series C Warrants
(the "Second  Closing").  The company received gross proceeds totaling $605,000.
For each two shares of common stock, the company issued investors one A Warrant,
one B Warrant and one C Warrant. Each two shares and three warrants were sold at
a  total  price  of  $0.20.  The  private   placement  was  deemed  exempt  from
registration  requirements  under Rule 506 of Regulation D of the Securities Act
of 1933. We are  registering in this offering  6,050,000  shares of common stock
and 9,075,000 shares issuable upon exercise of these outstanding warrants, which
includes  a good  faith  estimate  of  shares  of common  stock to  account  for
antidilution and price protection adjustments.

         The Second Closing triggered certain repricing adjustments to the terms
of the First Closing.  Accordingly, the purchase price for the First Closing was
adjusted  to $0.20 for each two shares  and three  warrants  that were sold.  As
adjusted,  the company IS obligated to issue an additional  12,832,552 shares of
common  stock,  6,233,501  Series A Warrants,  6,233,501  Series B Warrants  and
6,233,501 Series C Warrants.  For the First Closing,  the company is registering
in this  offering  16,498,999  shares of  common  stock  and  24,748,499  shares
issuable  upon  exercise of warrants,  which  includes a good faith  estimate of
shares of common stock to account for further  antidilution and price protection
adjustments.  The terms of the Series A Warrants,  the Series B Warrants and the
Series C Warrants, as adjusted are as follows:

         The Company agreed to file with the Securities and Exchange  Commission
not later than 30 days after the closing date of the Second  Closing,  and cause
to be effective within 120 days after the closing date of the Second Closing,  a
registration  statement  "rs" in order to  register  the shares of common  stock
issued to the investors and the shares  underlying  the warrants,  including the
shares  issuable upon exercise of warrants  issued to the  placement  agent.  In
addition,  on one  occasion,  for a period  commencing 91 days after the closing
date of the Second Closing,  but not later than two years after the closing date
of the Second  Closing,  upon written request of the holders of more than 50% of
the shares and warrant  shares  actually  issued upon exercise of warrants,  the
company is required to prepare and file a registration statement. The A Warrants
expire 150 days from the date the rs is declared effective by the Securities and
Exchange  Commission  and are  exercisable  at $0.12 per  share.  The B Warrants
expire four years after the date the rs is declared  effective by the Securities
and Exchange  Commission and are exercisable at $0.15 per share.  The C Warrants
expire three years after the date the rs is declared effective by the Securities
and Exchange Commission and are exercisable at $0.50 per share.

         The Company may call the  warrants  beginning 30 trading days after the
effective date of the rs and ending 30 trading days before the expiration of the
warrants.  A call  notice may be given by the  company  for the A Warrants  only
within  five  trading  days  after the common  stock has had a closing  price as
reported for the principal market of $0.24 or higher for 15 consecutive  trading
days.  A call notice may be given by the company for the B Warrants  only within
five trading days after the common stock has had a closing price as reported for
the principal market of $0.30 or higher for 15 consecutive  trading days. A call
notice may be given by the company for the C Warrants  only within five  trading
days  after  the  common  stock  has had a  closing  price as  reported  for the
principal market of $1.00 or higher for 15 consecutive trading days.

         Beginning  November 4, 2004 and until the  registration  statement  has
been  effective for 150 days,  the investors must be given at least ten business
days prior written notice of any proposed sale by the company of common stock or
other  securities or debt  obligations  except in  connection  with (a) employee
stock  options or  compensation  plans,  (b)  documented  legal fees, or (c) the
company already issued and outstanding  shares of common stock as of the closing
date of the Second  Closing.  Such  proposed  sales are referred to as "excepted
issuances."

                                      F-16
<PAGE>

         Other  than  the  excepted   issuances,   if  at  any  time  until  the
registration statement has been effective for 150 days, the company offer, issue
or agree to issue any common stock or securities convertible into or exercisable
for  shares  of  common  stock  (or  modify  any of the  foregoing  which may be
outstanding at any time prior to the closing date of the Second  Closing) to any
person or entity at a price per share or conversion or exercise  price per share
which shall be less than $0.10,  without the consent of each investor,  then the
company is  required  to issue,  for each such  occasion,  additional  shares of
common stock to each  investor so that the average per share  purchase  price of
the shares of common stock and the warrants  issued to the investor (of only the
common  stock or warrant  shares  still owned by the  investor) is equal to such
other lower price per share.  For purposes of this issuance and adjustment,  the
issuance of any security carrying the right to convert such security into shares
of common stock will result in the issuance of the  additional  shares of common
stock upon the issuance of such convertible security,  warrant,  right or option
and again upon any subsequent  issuances of shares of common stock upon exercise
of such  conversion or purchase rights if such issuance is at a price lower than
$0.10.

         The exercise price of the warrants is also subject to adjustment in the
event we effect a  reorganization,  consolidation or merger,  or transfer all or
substantially  all of our properties or assets.  Also, until the expiration date
of the  warrants,  if the company  issue any common  stock  other than  excepted
issuances,  prior to the complete  exercise of the warrants for a  consideration
less than the warrant exercise price that would be in effect at the time of such
issue, then the exercise price shall be reduced to such other lower issue price.
For purposes of this adjustment, the issuance of any security or debt instrument
carrying the right to convert such security or debt instrument into common stock
or of any warrant,  right or option to purchase  common stock shall result in an
adjustment  to the  exercise  price  upon the  issuance  of the  above-described
security, debt instrument, warrant, right, or option.

PLACEMENT AGENT FEE FOR THE FIRST CLOSING

         J.P.  Turner &  Company,  LLC  acted as  placement  agent for the First
Closing and for the Second Closing. For the First Closing, the company agreed to
pay J.P. Turner & Company a cash fee of 8% of the aggregate  purchase price. The
company  will also pay J.P.  Turner & Company 8% of the cash  proceeds  received
from the  exercise of  warrants  issued in  connection  with the  placement.  In
addition, the company issued J.P. Turner & Company a warrant to purchase 458,306
shares of common stock, exercisable for five years at an exercise price of $0.54
per  share.  Due to the price  adjustments  caused by the Second  Closing,  this
warrants  was  cancelled  and the company is  obligated  to issue J.P.  Turner &
Company a warrant to purchase 1,100,000 shares of common stock,  exercisable for
five years at an  exercise  price of $0.12 per  share.  Further,  J.P.  Turner &
Company will receive: (a) one Placement Agent's A Warrant,  exercisable at $0.14
per share,  for each eight A Warrants  exercised by an investor on a cash basis;
(b) one Placement  Agent's B Warrant,  exercisable at $0.18 per share,  for each
eight B Warrants exercised by an investor on a cash basis; and (c) one Placement
Agent's C Warrant,  exercisable  at $0.60 per  share,  for each eight C Warrants
exercised by an investor on a cash basis.  All  Placement  Agent's  Warrants are
exercisable for five years after the respective  issue dates, are not subject to
call and may be exercised on a cashless basis.

PLACEMENT AGENT FEE FOR THE SECOND CLOSING

         For the Second Closing, the company agreed to pay J.P. Turner & Company
a cash fee of 10% of the aggregate  purchase price. We will also pay J.P. Turner
& Company 8% of the cash proceeds  received from the exercise of warrants issued
in connection with the placement.  In addition, the company issued J.P. Turner &
Company  warrants to purchase  504,167 shares of common stock,  exercisable  for
five years at an  exercise  price of $0.12 per  share.  Further,  J.P.  Turner &
Company will receive: (a) one Placement Agent's A Warrant,  exercisable at $0.14
per share,  for each eight A Warrants  exercised by an investor on a cash basis;
(b) one Placement  Agent's B Warrant,  exercisable at $0.18 per share,  for each
eight B Warrants exercised by an investor on a cash basis; and (c) one Placement
Agent's C Warrant,  exercisable  at $0.60 per  share,  for each eight C Warrants
exercised by an investor on a cash basis.  All  Placement  Agent's  Warrants are
exercisable for five years after the respective  issue dates, are not subject to
call and may be  exercised  on a  cashless  basis.  We are  registering  in this
offering a total of 11,526,792  shares issuable upon exercise of warrants issued
or  issuable  to J.P.  Turner & Company  pursuant  to the First  Closing and the
Second  Closing,  which includes a good faith estimate of shares of common stock
to account for further antidilution and price protection adjustments.

NOTE 10: RELATED PARTY PAYABLE

At September 30, 2004, the Company owes $1,214,070 to WTI, an affiliated company
for services  under a master  services  agreement.  WTI is  affiliated  with the
Company through common ownership.  The obligation is noninterest bearing and not
subject to a maturity date.

                                      F-17
<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors
AccuPoll Holding Corp.

We have audited the accompanying consolidated balance sheets of AccuPoll Holding
Corp. and  subsidiaries  ("the  "Company") as of June 30, 2004 and 2003, and the
related consolidated  statements of operations,  stockholders'  deficit and cash
flows for the period from August 9, 2001  (Inception)  through June 30, 2002 and
for the  years  ended  June 30,  2004 and  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  standards  of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and  perform  the  audits to  obtain  reasonable  assurance  about  whether  the
consolidated  financial statements are free of material  misstatement.  An audit
includes  examining,  on a test  basis,  evidence  supporting  the  amounts  and
disclosures in the  consolidated  financial  statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
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 AccuPoll Holding
Corp.  and  subsidiaries  as of June 30, 2004 and 2003, and the results of their
operations  and their cash flows for the period from August 9, 2001  (Inception)
through  June 30,  2002 and for the  years  ended  June 30,  2004 and  2003,  in
conformity with accounting principles generally accepted in the United States of
America.

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will continue as a going  concern.  As discussed in Note 1, the
Company  has losses from  operations  through  June 30, 2004 and an  accumulated
deficit of approximately $22.6 million at that date, negative working capital at
June 30, 2004  approximating  $6.8  million and a lack of  operational  history.
These factors, among others, raise substantial doubt about the Company's ability
to continue as a going  concern.  Management's  plans in regard to these matters
are described in Note 1. The  consolidated  financial  statements do not include
any adjustments that may result from the outcome of this uncertainty.

As discussed in Note 10 to the accompanying  consolidated  financial statements,
the Company may be subject to possible  rescission  claims regarding the sale or
other issuances of certain equity  instruments.  Accordingly,  the June 30, 2003
consolidated  balance sheet has been restated to reflect the potential liability
associated  with such  transactions.  As  discussed  in Note 11, an  expense  of
$655,000  relating to warrants issued for services that were not provided by the
vendor  was  recorded  during the year ended  June 30,  2003.  Accordingly,  the
consolidated  statement of operations  for the year then ended has been restated
to reduce the previously reported net loss by $655,000.

                   /S/ SQUAR, MILNER, REEHL & WILLIAMSON, LLP
                   NEWPORT BEACH, CALIFORNIA

                   SEPTEMBER 27, 2004

                                      F-18

<PAGE>

                             ACCUPOLL HOLDING CORP.
                           CONSOLIDATED BALANCE SHEETS
                             June 30, 2004 and 2003

<TABLE>
<CAPTION>
                                                                                          2004            2003
                                                                                                     (AS RESTATED)
                                                                                     ------------    ------------
                                  ASSETS
<S>                                                                                  <C>             <C>
CURRENT ASSETS
      Cash                                                                           $    113,789    $         --
      Accounts receivable, net                                                            254,895              --
      Inventories                                                                         168,636              --
      Deferred acquisition costs                                                               --         144,206
      Prepaid expenses                                                                         --           2,500
      Total Current Assets                                                                     --              --
                                                                                          537,320         146,706
PROPERTY AND EQUIPMENT, net                                                                14,012              --
CAPITALIZED SOFTWARE DEVELOPMENT COSTS, net                                             2,544,207       1,403,899
OTHER ASSETS                                                                               26,246              --
                                                                                     ------------    ------------
      TOTAL ASSETS                                                                   $  3,121,785    $  1,550,605
                                                                                     ============    ============
                   LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
      Accounts payable and accrued expenses                                          $  1,817,284    $    931,503
      Related party payables                                                            1,228,070         872,940
      Deferred revenues                                                                    74,628              --
      Convertible debt. net of discount                                                 3,304,600              --
      Notes and accrued interest payable to related parties                                30,000         175,000
      Put liability related to warrant issuance                                           163,760         113,750
      Liabilities subject to compromise                                                   732,544              --
                                                                                     ------------    ------------
                                                                                        7,350,886       2,093,193
                                                                                     ------------    ------------
EQUITY INSTRUMENTS SUBJECT TO RESCISSION                                                6,200,000       4,377,033
                                                                                     ------------    ------------
COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' DEFICIT
      Convertible Series A preferred stock, $0.01 par value, 80,000 shares
      authorized, no shares issued or outstanding (liquidation preference of zero)             --              --
      Common stock, par value of $0.001, 600,000,000 shares
        authorized; 158,482,171 and 112,945,963 shares issued and outstanding
        at June 30, 2004 and 2003, respectively                                           158,482         112,946
      Additional paid-in capital                                                       12,046,817       2,222,580
      Accumulated deficit                                                             (22,634,400)     (7,255,147)
                                                                                     ------------    ------------
                                                                                      (10,429,101)     (4,919,621)
                                                                                     ------------    ------------
      TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                                    $  3,121,785    $  1,550,605
                                                                                     ============    ============
</TABLE>

SEE ACCOMPANYING NOTES TO THESE CONSOLIDATED FINANCIAL STATEMENTS

                                      F-19

<PAGE>

                             ACCUPOLL HOLDING CORP.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
      For The Years Ended June 30, 2004 and 2003, and For The Period From
                August 9, 2001 (Inception) Through June 30, 2002

<TABLE>
<CAPTION>
                                         YEAR ENDED      YEAR ENDED      PERIOD ENDED
                                       JUNE 30, 2004    JUNE 30, 2003    JUNE 30, 2002
                                                        (As Restated)
                                       -------------    -------------    -------------
<S>                                    <C>              <C>              <C>
NET SALES                              $   1,508,656    $          --    $          --
COST OF SALES                              1,185,797               --               --
                                       -------------    -------------    -------------
GROSS PROFIT                                 322,859               --               --
EXPENSES

      General and administrative           3,160,257        3,104,192          904,083
      Professional fees                    4,264,156        1,714,475        1,198,622
      Interest                             4,534,947           29,900          303,875
      Loss on disposal of investment       1,200,000               --               --
      Impairment of goodwill               2,542,752               --               --
                                       -------------    -------------    -------------
                                          15,702,112        4,848,567        2,406,580
                                       -------------    -------------    -------------
NET LOSS                               $ (15,379,253)   $  (4,848,567)   $  (2,406,580)
                                       =============    =============    =============
BASIC AND DILUTED LOSS
    PER COMMON SHARE                   $       (0.12)   $       (0.05)   $       (0.04)
                                       =============    =============    =============
WEIGHTED AVERAGE NUMBER OF COMMON
    SHARES OUTSTANDING                   130,782,481      106,687,447       68,735,272
                                       =============    =============    =============
</TABLE>

SEE ACCOMPANYING NOTES TO THESE CONSOLIDATED FINANCIAL STATEMENTS

                                      F-20

<PAGE>

                             ACCUPOLL HOLDING CORP.
                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
       For The Years Ended June, 30 2004 and 2003 and For The Period From
                August 9, 2001 (Inception) Through June 30, 2002

<TABLE>
<CAPTION>
                                                      Common Stock         Common Stock Additional                       Total
                                                -------------------------- Subscription   Paid-in       Accumulated   Stockholder's
                                                   Shares        Amount     Receivable    Capital         Deficit        Deficit
                                                -----------   ------------   --------   ------------    ------------   ------------
<S>                                             <C>           <C>            <C>        <C>             <C>            <C>
Balance at August 9, 2001 (Inception)                    --   $         --   $     --   $        --     $         --   $         --

Issuance of common stock upon formation          61,280,000         61,280         --        (61,280)             --             --

Issuance of common stock at $0.08 per
share for the conversion of notes payable,
including accrued interest of $16,375             3,724,292          3,724         --        300,151              --        303,875

Issuance of common stock at $0.08
per share for note receivable                       612,800            613         --         49,387              --         50,000

Proceeds from the issuance of common
stock at $0.08 per share in connection with
the exercise of warrants                          3,724,292          3,724    (12,500)       298,744              --        289,968

Proceeds from the issuance of common stock
at $0.12 per share in connection with the
exercise of warrants                              6,177,024          6,177         --        750,004              --        756,181

Issuance of common stock in connection
with the merger with WIPC (including 18,400,000
shares issued to brokers)                        18,639,000         18,639         --        (18,639)             --             --

Issuance of common stock at $0.06 per share
for services                                      4,800,000          4,800         --        295,200              --        300,000

Issuance of common stock at $0.08 per share
for services                                      3,840,000          3,840         --        309,504              --        313,344

Estimated fair value of warrants granted
in connection with convertible debt                      --             --         --        287,500              --        287,500

Estimated fair value of options and
warrants granted for services                            --             --         --        813,525              --        813,525

Equity instruments subject to rescission                 --             --         --     (1,021,834)             --     (1,021,834)

Interest on equity instruments subject
to rescission                                            --             --         --        (12,137)             --        (12,137)

Net loss                                                 --             --         --             --      (2,406,580)    (2,406,580)
                                                -----------   ------------   --------   ------------    ------------   ------------
Balance at June 30, 2002 (as restated)          102,797,408   $    102,797   $(12,500)  $  1,990,125    $ (2,406,580)  $   (326,158)
                                                ===========   ============   ========   ============    ============   ============
Issuance of common stock at $0.91 for services        6,593              7         --          5,993              --          6,000

Issuance of common stock at $1.02 for services       32,862             33         --         33,486              --         33,519

Issuance of common stock at $1.04 for services       17,000             17         --         17,663              --         17,680

Issuance of common stock at $1.05 for services      207,142            207         --        217,292              --        217,499

Issuance of common stock at $1.17 for services      120,000            120         --        140,280              --        140,400

Issuance of common stock at $1.18 for services        6,667              7         --          7,860              --          7,867

Issuance of common stock at $1.20 for services       30,000             30         --         35,970              --         36,000

Issuance of common stock at $1.25 for services        8,500              9         --         10,616              --         10,625

Issuance of common stock at $1.40 for services       20,000             20         --         27,980              --         28,000

Issuance of common stock at  $0.00 per share
in connection with the cashless  exercises
of warrants                                         208,540            209         --           (209)             --             --

Proceeds from the issuance of common stock at
$0.06 per share in connection with the exercise
of warrants                                         911,954            912         --         56,201              --         57,113

Proceeds from the issuance of common stock at
$0.08 per share in connection with the exercise
of warrants                                         245,120            245         --         19,755              --         20,000

Proceeds from the issuance of common stock at
$0.12 per share in connection with the exercise
of warrants                                       2,828,272          2,828         --        343,113              --        345,941

Proceeds from the issuance of common stock at
$0.25 per share in connection with the
exercise of warrants                                200,000   $        200   $     --   $     49,800    $         --   $     50,000
</TABLE>

SEE ACCOMPANYING NOTES TO THESE CONSOLIDATED FINANCIAL STATEMENTS ...CONTINUED

                                      F-21

<PAGE>

<TABLE>
<CAPTION>
                                                      Common Stock         Common Stock Additional                       Total
                                                -------------------------- Subscription   Paid-in       Accumulated   Stockholder's
                                                   Shares        Amount     Receivable    Capital         Deficit        Deficit
                                                -----------   ------------   --------   ------------    ------------   ------------
<S>                                             <C>           <C>            <C>        <C>             <C>            <C>
Proceeds from the issuance of common stock at
$0.06 per share for cash                            535,445   $        535   $     --   $     32,929    $         --   $     33,464

Proceeds from the issuance of common stock at
$0.12 per share for cash                          3,642,480          3,642         --        444,057              --        447,699

Proceeds from the issuance of common stock at
$0.25 per share for cash                            840,000            840         --        209,160              --        210,000

Proceeds from the issuance of common stock at
$0.30 per share for cash                             52,280             52         --         15,782              --         15,834

Proceeds from the issuance of common stock at
$0.40 per share for cash                             62,500             63         --         24,937              --         25,000

Proceeds from the issuance of common stock at
$0.47 per share for cash                             95,200             95         --         44,940              --         45,035

Proceeds from the issuance of common stock at
$0.50 per share for cash                             50,000             50         --         24,950              --         25,000

Proceeds from the issuance of common stock at
$0.95 per share for cash                             28,000             28         --         26,572              --         26,600

Commissions paid for fund raising activity               --             --         --       (281,944)             --       (281,944)

Beneficial conversion feature in connection
with the issuance of convertible debt                    --             --         --         50,000              --         50,000

Estimated fair value of warrants granted in
connection with note payable                             --             --         --         20,000              --         20,000

Estimated fair value of warrants granted
for services                                             --             --         --      1,839,000              --      1,839,000

Estimated fair value of options granted
for services                                             --             --         --        273,084              --        273,084

Liability incurred in connection with the
issuance of warrants                                     --             --         --       (113,750)             --       (113,750)

Equity instruments subject to rescission                 --             --         --     (3,185,309)             --     (3,185,309)

Interest on equity instruments subject to
rescission                                               --             --         --       (157,753)             --       (157,753)

Write off of subscriptions receivable                    --             --     12,500             --              --         12,500

Net loss                                                 --             --         --             --      (4,848,567)    (4,848,567)
                                                -----------   ------------   --------   ------------    ------------   ------------
Balance at June 30, 2003 (as restated)          112,945,963        112,946   $     --   $  2,222,580    $ (7,255,147)  $ (4,919,621)
                                                ===========   ============   ========   ============    ============   ============
Common stock issued for cash                      6,553,857          6,554         --        799,518              --        806,072

Common stock issued for services                     35,000             35         --         34,915              --         34,950

Proceeds from the issuance of common stock
in connection with the exercise of warrants      20,502,794         20,503         --      3,778,113              --      3,798,616

Estimated fair value of warrants
granted for services                                     --             --         --        786,000              --        786,000

Liability incurred in connection with the
issuance of warrants                                     --             --         --        (50,010)             --        (50,010)
</TABLE>

....CONTINUED

SEE ACCOMPANYING NOTES TO THESE CONSOLIDATED FINANCIAL STATEMENTS

                                      F-22

<PAGE>

<TABLE>
<CAPTION>
                                                      Common Stock         Common Stock Additional                       Total
                                                -------------------------- Subscription   Paid-in       Accumulated   Stockholder's
                                                   Shares        Amount     Receivable    Capital         Deficit        Deficit
                                                -----------   ------------   --------   ------------    ------------   ------------
<S>                                             <C>           <C>            <C>        <C>             <C>             <C>
Estimated fair value of warrants granted
in connection with convertible debt                      --             --         --        362,800             --         362,800

Common stock issued in connection with
conversion of convertible debt and
accrued interest                                  3,881,250          3,881         --        772,369              --        776,250

Beneficial conversion feature in connection
with the issuance of convertible debt                    --             --         --      3,641,800              --      3,641,800

Issuance of common stock in connection
with cashless exercise of options                 6,030,307          6,030         --         (6,030)             --             --

Commissions paid for fund raising activity               --             --         --       (277,000)             --       (277,000)

Acquisition of Z Prompt                           8,533,000          8,533         --      1,804,729              --      1,813,262

Equity instruments subject to rescission                 --             --         --     (1,500,967)             --     (1,500,967)

Interest on equity instruments subject
to rescission                                            --             --         --       (322,000)             --       (322,000)

Net loss                                                 --             --         --             --     (15,379,253)   (15,379,253)
                                                -----------   ------------   --------   ------------    ------------   ------------
Balance at June 30, 2004                        158,482,171   $    158,482   $     --   $ 12,046,817    $(22,634,400)  $(10,429,101)
                                                ===========   ============   ========   ============    ============   ============
</TABLE>

SEE ACCOMPANYING NOTES TO THESE CONSOLIDATED FINANCIAL STATEMENTS

                                      F-23

<PAGE>

                             ACCUPOLL HOLDING CORP.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
       For The Years Ended June 30, 2004 and 2003, and For The Period From
                August 9, 2001 (Inception) Through June 30, 2002

<TABLE>
<CAPTION>
                                                                                     YEAR ENDED      YEAR ENDED     PERIOD ENDED
Cash flows from operating activities:                                               JUNE 30, 2004   JUNE 30, 2003   JUNE 30, 2002
                                                                                                   (AS RESTATED)
                                                                                   ----------------------------------------------
<S>                                                                                 <C>             <C>             <C>
     Net loss                                                                       $(15,379,253)   $ (4,848,567)   $ (2,406,580)
     Adjustments to reconcile net loss to net cash used in
       operating activities:
         Depreciation and amortization                                                   245,408              --              --
         Loss on disposal of fixed assets                                                 12,640              --              --
         Estimated fair value of warrants granted in
            connection with notes payable                                                     --          20,000         287,500
         Estimated fair value of options and warrants
            granted for services                                                         786,000       2,112,084         813,525
         Estimated fair value of common stock issued
            for services                                                                  34,950         497,590         327,344
         Amortization of estimated fair value of warrants granted
            and beneficial conversion feature in connection with
            the issuance of convertible notes payable                                  4,054,600              --              --
         Convertible debt issued for services                                          1,276,000              --              --
         Loss on disposal of investment                                                1,200,000              --              --
         Impairment of goodwill                                                        2,542,752              --              --
         Accrued interest related to the conversion of notes payable                          --              --          16,375
         Write off of subscription receivable                                                 --          12,500              --
         Write off of prepaid consulting                                                      --         286,000              --
         Changes in operating assets and liabilities:
            Accounts receivable                                                         (209,939)             --              --
            Inventories                                                                  (73,300)             --              --
            Prepaid expenses                                                               2,500          (2,500)             --
            Other assets                                                                 128,996              --              --
            Accounts payable and accrued expenses                                        622,237         755,211         176,292
            Related party payables                                                       358,327          10,000         151,020
            Increase in capitalized software development costs                        (1,371,600)       (530,013)       (111,966)
                                                                                    ------------    ------------    ------------
     Net cash used in operating activities                                            (5,769,682)     (1,687,695)       (746,490)
                                                                                    ------------    ------------    ------------
Cash flows from investing activities:
     Increase in deferred acquisition costs                                                   --        (144,206)             --
     Purchases of property and equipment                                                 (11,135)             --              --
     Proceeds from related party note receivable                                              --         300,000        (300,000)
     Cash of acquired entity                                                               2,368              --              --
                                                                                    ------------    ------------    ------------
     Net cash provided by (used in) investing activities                                  (8,767)        155,794        (300,000)
                                                                                    ------------    ------------    ------------
Cash flows from financing activities:
     Proceeds from the issuance of notes payable to related parties                      210,950         175,000              --
     Principal payments of notes payable to related parties                             (195,000)             --              --
     Proceeds from issuance of convertible debt                                        1,528,600          50,000         287,500
     Borrowings on line-of-credit                                                         20,000              --              --
     Proceeds from the issuance of common stock                                          806,072         546,688              --
     Proceeds from issuance of common stock upon exercise of warrants, net             3,521,616         473,054       1,046,149
                                                                                    ------------    ------------    ------------

     Net cash provided by financing activities                                         5,892,238       1,244,742       1,333,649
                                                                                    ------------    ------------    ------------
Net increase (decrease) in cash                                                          113,789        (287,159)        287,159
Cash at beginning of period                                                                   --         287,159              --
                                                                                    ------------    ------------    ------------

Cash at end of period                                                               $    113,789    $         --    $    287,159
                                                                                    ============    ============    ============

Supplemental  disclosure of cash flow  information - Cash paid during the period
for:

         Interest (none paid in cash)                                               $         --    $         --    $         --
                                                                                    ============    ============    ============
         Income taxes                                                               $        800    $        800    $        800
                                                                                    ============    ============    ============
</TABLE>

SUPPLEMENTAL  DISCLOSURE  OF NON-CASH  FINANCING AND  OPERATING  ACTIVITIES  See
accompanying  notes to the  consolidated  financial  statements for  information
relating to non-cash  investing  and  financing  activities  concerning  prepaid
consulting  fees,  issuance  of common  stock  related to  convertible  debt and
warrants,   issuance  of  preferred  stock,  increase  in  capitalized  software
development costs, beneficial conversion features and related party payables.

SEE ACCOMPANYING NOTES TO THESE CONSOLIDATED FINANCIAL STATEMENTS

                                      F-24

<PAGE>

                             ACCUPOLL HOLDING CORP.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2004

NOTE 1 ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION

AccuPoll  Holding  Corporation,  a Nevada  corporation  (the "parent  company"),
principally operates through its wholly owned subsidiary  AccuPoll,  Inc., which
was incorporated on August 9, 2001 in Delaware. The parent company is engaged in
the design and  development  of a voting  system with an intuitive  touch-screen
interface (the "Voting System") that provides a polling place electronic  voting
solution  that  is  reliable,   accurate,   immediate,   secure,  easy  to  use,
confidential and auditable.  The Voting System has the ability to simultaneously
produce two  different  electronic  audit  trails  (recorded on both the polling
place administrative work station and the local voting station),  in addition to
generating  a  printed-paper  ballot.  The parent  company  completed  a reverse
acquisition  with a publicly  traded  company (see Note 2) in May 2002,  and its
common stock is quoted on the  Over-The-Counter  Bulletin Board under the symbol
"ACUP." For financial reporting purposes, the parent company was classified as a
development stage enterprise until November 2003.

PRINCIPLES OF CONSOLIDATION

                                     GENERAL

The accompanying  consolidated  financial statements include the accounts of the
parent company and its wholly-owned  subsidiary AccuPoll,  Inc. In addition, the
accounts of Z prompt, Inc. ("Z prompt"), a wholly-owned subsidiary, are included
in  such  financial   statements   from  November  1,  2003.   All   significant
inter-company balances and transactions have been eliminated in consolidation.

Except where the context requires otherwise, the entities named in the preceding
paragraph are hereinafter collectively referred to as the "Company."

                             BANKRUPTCY OF Z PROMPT

As  discussed  in Note 12, Z prompt filed  voluntary  bankruptcy  in March 2004.
Although  the  Company  is not  presently  a member of the  unsecured  creditors
committee  that was formed in connection  with the bankruptcy  proceedings,  the
Company is the single largest pre-petition creditor of Z prompt.

                                      F-25

<PAGE>

In addition, as described in Note 6, the Company and certain of its officers and
principal  stockholders are presently  involved in civil litigation with certain
former stockholders and officers of Z prompt.  Management has determined that it
would not be meaningful to de-consolidate  the accounts of Z prompt at this time
because the Company (a) has a substantial  negative investment in Z prompt as of
June 30, 2004, and (b) expects to re-gain  control of this  subsidiary  based on
the   expectation   that  Z  prompt  will  be  able  to  negotiate  a  confirmed
reorganization  plan and emerge from bankruptcy by approximately  March of 2005.
See Note 3 for additional information regarding Z prompt.

                                AFFILIATED ENTITY

As further  explained  below in the "Variable  Interest  Entity" section of this
note,  the  accounts of affiliate  Web Tools  International,  Inc.  ("WTI") were
consolidated  with those of the Company as of January 1, 2004 in accordance with
Financial Accounting Standards Board ("FASB") Interpretation ("FIN") No. 46. For
reasons discussed in Note 5, WTI was de-consolidated as of April 1, 2004.

GOING CONCERN/LIQUIDITY CONSIDERATIONS

The Company has not generated  any revenues  from its Voting System  operations,
and there is no  assurance  of any future  revenues.  The Company  will  require
substantial  additional  funding  for  continuing  the  development,   obtaining
regulatory approval, and commercialization of its product. There is no assurance
that the Company will be able to obtain sufficient  additional funds when needed
or that such funds,  if available,  will be obtainable on terms  satisfactory to
the Company.

Management has taken actions to address these matters, which include:

o        Retention of experienced management personnel with particular skills in
         the commercialization of such products;

o        Attainment  of  technology  to develop  such  products  and  additional
         products; and

o        Raising  additional  funds  through  the  sale  of debt  and/or  equity
         securities.

Federal, State and various foreign government regulations govern the sale of the
Company's products.  There can be no assurance that the Company will receive the
regulatory approval required to market its proposed products.

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will  continue as a going  concern  which  contemplates,  among
other things,  the realization of assets and  satisfaction of liabilities in the
ordinary  course of business.  The Company has incurred  losses through June 30,
2004, has negative working capital at that date of  approximately  $6.8 million,
and has a lack of operational history which, among other factors,

                                      F-26

<PAGE>

raise  substantial  doubt about its ability to continue as a going concern.  The
Company intends to fund operations through sales of the Voting System, but there
is no  commitment  by any  entities  for  the  purchase  of any of the  proposed
products.  In the absence of significant sales and profits, the Company may seek
to raise additional funds to meet its working capital  requirements through debt
and/or   equity   financing   arrangements.   Management   believes   that  such
arrangements,  combined with the net proceeds from the transaction  described in
Note 18, will be sufficient to fund the Company's capital expenditures,  working
capital needs and other cash requirements for the year ending June 30, 2005. The
successful  outcome of future  activities cannot be determined at this time, and
there is no assurance that, if achieved,  the Company will have sufficient funds
to execute its intended business plan or generate positive operating results.

These circumstances, combined with the potential liability described in Note 10,
raise  substantial  doubt  about the  Company's  ability to  continue as a going
concern. The accompanying  consolidated  financial statements do not include any
adjustments that might result from the outcome of this uncertainty.

OTHER RISKS AND UNCERTAINTIES

The  Company  intends  to  operate  in an  industry  that is  subject to intense
competition,  government  regulation  and  technological  change.  The Company's
operations  are  subject  to  significant  risks  and  uncertainties   including
financial,  operational,  technological,  regulatory and other risks  associated
with an emerging business, including the potential risk of business failure.

From time to time, the Company  maintains cash balances at certain  institutions
in excess of the FDIC limit of $100,000.

USE OF ESTIMATES

The Company  prepares its consolidated  financial  statements in conformity with
accounting  principles  generally  accepted  in the  United  States  of  America
("GAAP"), which require 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 reported
amounts of  revenues  and  expenses  during the  reporting  period.  Significant
estimates made by management include  realization of long-lived  assets,  equity
instruments subject to rescission,  valuation of stock options and warrants, and
the continued consolidation of a wholly-owned  subsidiary in bankruptcy.  Actual
results could differ from those estimates.

SOFTWARE DEVELOPMENT COSTS

In accordance with Statement of Financial  Accounting  Standards ("SFAS") No. 86
"Accounting for the Costs of Computer Software to be Sold,  Leased, or Otherwise
Marketed,"

                                      F-27

<PAGE>

the Company capitalizes certain costs related to the development of new software
products or the enhancement of existing  software  products for sale or license.
These  costs  are  capitalized  from  the  point  in  time  that   technological
feasibility  has been  established,  as evidenced by a working model or detailed
working-program  design to the point in time that the product is  available  for
general  release  to  customers.  Capitalized  software  development  costs  are
amortized on a straight-line  basis over the three-year  estimated economic life
of the products,  beginning (as applicable)  with the general product release to
customers or when the Voting System  qualified under certain federal  standards.
Research and  development  costs  incurred prior to  establishing  technological
feasibility  and  costs  incurred  subsequent  to the  events  described  in the
preceding sentence are charged to expense as incurred.

The Company periodically evaluates whether events or circumstances have occurred
that  indicate  that the  remaining  useful  lives of the  capitalized  software
development costs should be revised or that the remaining balance of such assets
may not be recoverable.  At June 30, 2004, management believes that no revisions
to the remaining useful lives or write-down of capitalized  software development
costs are  required.  The Company  began  amortizing  its  capitalized  software
development costs in April 2004,  following the March 2004  qualification of its
Voting System as complying with certain federal voting system standards; at June
30, 2004, accumulated amortization approximated $ 230,000.

FAIR VALUE OF FINANCIAL INSTRUMENTS

SFAS No. 107, "Disclosures About Fair Value of Financial  Instruments," requires
disclosure of fair value  information  about  financial  instruments  when it is
practicable  to  estimate  that  value.  The  carrying  amount of the  Company's
accounts payable and accrued expenses  approximates  their estimated fair values
due to the short-term maturities of those financial instruments.  In the opinion
of management, the fair value of payables to related parties cannot be estimated
without incurring excessive costs; for that reason, the Company has not provided
such disclosure.  Other information about related-party liabilities (such as the
carrying  amount,  the interest rate, and the maturity date) is provided,  where
applicable, elsewhere in these notes to consolidated financial statements.

STOCK-BASED COMPENSATION

The Company accounts for stock-based  compensation issued to employees using the
intrinsic  value based  method as  prescribed  by  Accounting  Principles  Board
Opinion No. 25 ("APB 25"), "Accounting for Stock Issued to Employees." Under the
intrinsic value based method,  compensation  is the excess,  if any, of the fair
value of the stock at the grant date (or other measurement date) over the amount
an employee must pay to acquire the stock.  Compensation,  if any, is recognized
over the applicable service period, which is usually the vesting period.

                                      F-28

<PAGE>

SFAS No. 123,  "Accounting  for  Stock-Based  Compensation,"  if fully  adopted,
changes the method of accounting for employee  stock-based  compensation  to the
fair value based method. In addition,  under this pronouncement,  the fair value
of options and warrants  issued to  non-employees  is estimated  using an option
pricing  model that takes into  account the stock  price at the grant date,  the
exercise price, the expected life of the equity instrument,  and the annual rate
of quarterly  dividends.  Compensation  expense,  if any, is recognized over the
applicable service period, which is usually the vesting period.

FIN No. 44, "Accounting for Certain  Transactions  Involving Stock Compensation,
an  Interpretation  of APB 25," clarifies the  application of APB 25 for (a) the
definition of  "employee"  for purposes of applying APB 25, (b) the criteria for
determining  whether  a plan  qualifies  as a  non-compensatory  plan,  (c)  the
accounting  consequences of various  modifications  to the terms of a previously
fixed  stock  option or  award,  and (d)  accounting  for an  exchange  of stock
compensation  awards in a business  combination.  Management  believes  that the
Company accounts for transactions involving stock-based employee compensation in
accordance with FIN No. 44.

SFAS  No.  148,  "Accounting  for  Stock-Based  Compensation  -  Transition  and
Disclosure,  an  amendment  of SFAS  123," was  issued in  December  2002 and is
effective for fiscal years ended after December 15, 2002.  SFAS No. 148 provides
alternative  methods  of  transition  for a  voluntary  change to the fair value
method of accounting for stock-based employee  compensation.  In addition,  this
Statement  amends  the  disclosure  requirements  of  SFAS  No.  123 to  require
prominent  disclosure in both annual and interim financial  statements about (a)
the method of  accounting  for  stock-based  employee  compensation  and (2) the
effect of the method used on reported results.

The  adoption of the  accounting  methodology  of SFAS No. 123 is  optional  for
stock-based  employee  compensation,  and the  Company  has  elected to continue
accounting  for options  issued to employees  using APB 25.  However,  pro forma
disclosures, as if the Company adopted the cost recognition requirements of SFAS
No. 123, are required to be presented.

At June 30, 2004, the Company has no stock-based  employee  compensation  plans;
however,  there have been  non-plan  options  granted by the  Company to certain
employees.  There is no stock-based  employee  compensation expense reflected in
net loss for fiscal  2004,  fiscal  2003,  or for the period from August 9, 2001
(Inception)  through June 30, 2002 because  options  granted to employees had an
exercise  price  equal to or  greater  than the market  value of the  underlying
common stock on the grant date. The following  table  illustrates  the effect on
net loss and loss per common  share if the  Company  had  applied the fair value
recognition provisions of SFAS 123 to stock-based employee compensation.

                                      F-29

<PAGE>

<TABLE>
<CAPTION>
                                                        PERIODS ENDED JUNE 30,
                                                2004            2003            2002
                                           ------------    ------------    ------------
<S>                                        <C>             <C>             <C>
Net loss attributable to common
    stockholders *                         $(15,701,253)   $ (5,006,567)   $ (2,418,717)
Add: total stock-based employee
     compensation expense determined
     under fair value based method
     for all awards                          (1,421,100)       (598,230)        (68,340)
                                           ------------    ------------    ------------
    Pro-forma                              $(17,122,353)   $ (5,604,797)   $ (2,487,057)
                                           ============    ============    ============
Basic and diluted loss per common share:
    As reported                            $      (0.12)   $      (0.05)   $      (0.04)
                                           ============    ============    ============
    Pro-forma                              $      (0.13)   $      (0.05)   $      (0.04)
                                           ============    ============    ============
</TABLE>

* These amounts include interest related to certain equity  instruments  subject
to rescission (see Note 10).

BENEFICIAL CONVERSION FEATURE

The  convertible  feature of a note  payable (see Note 4) provides for a rate of
conversion that is below market value. This feature is normally characterized as
a beneficial conversion feature ("BCF").  Pursuant to Emerging Issues Task Force
("EITF") Issue No. 98-5 ("EITF 98-5"),  "Accounting For  Convertible  Securities
with  Beneficial  Conversion  Features  or  Contingently  Adjustable  Conversion
Ratio," and EITF Issue No. 00-27, "Application of EITF Issue No. 98-5 To Certain
Convertible  Instruments,"  the Company has estimated the fair value of such BCF
to approximate  $50,000 for the year ended June 30, 2003 and none for the period
ended June 30, 2002.

In connection with its fiscal 2004 borrowings  under several  convertible  notes
payable,  the Company  recorded and amortized BCFs of  approximately  $3,640,000
(including  the  transactions  described  in Notes 4, 13 and 14) during the year
ended June 30, 2004.

INVENTORIES

Inventories  are stated at the lower of cost or  estimated  market,  and consist
entirely of finished  goods (Voting  System  machines).  Cost is determined on a
weighted average basis that approximates the first-in,  first-out method. Market
is estimated by comparison with recent  purchases or net realizable  value.  The
net realizable  value is estimated based on  management's  forecast for sales of
the Company's  products or services in the ensuing years.  The industry in which
the Company operates is  characterized by technological  advancement and change.
Should demand for the Company's  products  prove to be  significantly  less than
anticipated,  the ultimate  realizable value of the Company's inventory could be
substantially  less  than  the  amount  shown in the  accompanying  consolidated
balance sheets.

                                      F-30

<PAGE>

REVENUE RECOGNITION

The Company  records  sales when goods are  shipped to the  customer or upon the
completion  of the service.  Amounts  received  prior to the  completion  of the
earnings process, such as maintenance contracts paid in advance, are included in
deferred revenues in the accompanying consolidated balance sheets.

The Securities and Exchange  Commission (the "SEC") has issued Staff  Accounting
Bulletin No. 104 ("SAB 104"),  "Revenue  Recognition,"  which outlines the basic
criteria  that  must be met to  recognize  revenue  and  provides  guidance  for
presentation  of revenue  and for  disclosures  related  to revenue  recognition
policies in financial  statements filed with the SEC.  Management  believes that
the Company's revenue recognition accounting policy conforms to SAB 104.

INDEFINITE-LIFE INTANGIBLE ASSETS

Goodwill  represents  the excess of the purchase  price over the estimated  fair
value  of  identifiable  net  assets  acquired.  The  Company  has  applied  the
provisions  of  SFAS  No.  142,  "Goodwill  and  Other  Intangible  Assets,"  in
accounting  for  goodwill.  SFAS  No.  142  requires  that  goodwill  and  other
intangible  assets that have indefinite  lives not be amortized,  but instead be
tested at least annually for impairment when events or changes in  circumstances
indicate  that the  asset  might be  impaired.  For  indefinite-life  intangible
assets, impairment is tested by comparing the carrying value of the asset to the
estimated  fair  value of the  reporting  unit to which they are  assigned.  The
Company recorded an impairment charge approximating  $2,543,000 to write-off all
of the goodwill associated with the acquisition of Z Prompt described in Note 3.

IMPAIRMENT OF LONG LIVED-ASSETS

The Company  periodically  evaluates the carrying value of its long-lived assets
under the provisions of SFAS No. 144, "Accounting for the Impairment or Disposal
of Long-Lived Assets." SFAS No. 144 addresses financial accounting and reporting
for the impairment or disposal of long-lived assets, and supersedes (a) SFAS No.
121,  "Accounting  for the  Impairment of Long-Lived  Assets and for  Long-Lived
Assets to be Disposed Of," and (b) the  accounting  and reporting  provisions of
APB Opinion  No. 30  ("Reporting  the Effects of the  Disposal of a Segment of a
Business,  and  Extraordinary,  Unusual and  Infrequently  Occurring  Events and
Transactions") for the disposal of a segment of a business as previously defined
in that Opinion.  SFAS No. 144 also amends Accounting  Research Bulletin ("ARB")
No. 51,  "Consolidated  Financial  Statements,"  to eliminate  the  exception to
consolidation of a subsidiary when control is likely to be temporary.

SFAS No. 144 requires impairment losses to be recorded on long-lived assets used
in  operations,  including  amortizable  intangible  assets when  indicators  of
impairment are present. Indicators of impairment include an economic downturn or
a change in the assessment of

                                      F-31

<PAGE>

future  operations.  In the event a condition is identified that may indicate an
impairment  issue, an assessment is performed using a variety of  methodologies,
including  analysis  of  undiscounted  future  cash  flows,  estimates  of sales
proceeds and independent  appraisals.  If such assets are impaired,  the expense
recognized  is the amount by which the carrying  amount of the asset exceeds the
estimated fair value.  Assets to be disposed of are reported at the lower of the
carrying value or the estimated fair market value, less cost to sell.

On March  31,  2004,  the  Company's  wholly-owned  subsidiary  Z  prompt  filed
bankruptcy (see Note 12). In connection with the bankruptcy  filing, the Company
recorded an impairment charge  approximating  $2,543,000 to write-off all of the
goodwill associated with the acquisition of this subsidiary (see Note 3).

INCOME TAXES

Deferred income taxes reflect the estimated tax effect of temporary  differences
between the carrying  amounts of assets and liabilities for financial  reporting
purposes and the amounts reported for income tax purposes. The Company records a
valuation  allowance for deferred tax assets when,  based on  management's  best
estimate of taxable income (if any) in the foreseeable future, it is more likely
than not that some portion of the deferred tax assets may not be realized.

ADVERTISING

The Company  expenses the cost of advertising as incurred.  Advertising  expense
approximated  $170,000,  $310,000, and $90,000 for the years ended June 30, 2004
and 2003 and for the period from  August 9, 2001  (Inception)  through  June 30,
2002, respectively.

RESEARCH AND DEVELOPMENT

Certain expenditures for research and development activities relating to product
development  and   improvement   are  charged  to  expense  as  incurred.   Such
expenditures  approximated  $175,000 for the period  August 9, 2001  (Inception)
through June 30, 2002.  There were no such  expenditures for the year ended June
30, 2003. The Company  incurred  approximately  $137,000 for  development of its
products during fiscal 2004.

                                      F-32

<PAGE>

LOSS PER COMMON SHARE

Under SFAS No. 128,  "Earnings per Share," basic  earnings per share is computed
by dividing net income available to common shareholders by the  weighted-average
number  of  common  shares  assumed  to be  outstanding  during  the  period  of
computation.  Diluted  earnings  per common  share is computed  similar to basic
earnings per common share,  except that the  denominator is increased to include
the number of additional  common shares that would have been  outstanding if the
potential  common shares had been issued and the  additional  common shares were
dilutive (approximating  75,000,000,  31,700,000,  and 28,200,000 shares at June
30, 2004,  2003 and 2002,  respectively),  based on the treasury  stock  method.
Because the Company has incurred  net losses,  basic and diluted loss per common
share  are  equal   because   additional   potential   common  shares  would  be
anti-dilutive.

                                                PERIODS ENDED JUNE 30,
                                        2004            2003            2002
                                  -------------   -------------   -------------
Net loss, as reported             $ (15,379,253)  $  (4,848,567)  $  (2,406,580)
Interest related to equity
    instruments subject to
     rescission                        (322,000)       (158,000)        (12,137)
                                  -------------   -------------   -------------
Net loss available to common
     stockholders                 $ (15,701,253)  $  (5,006,567)  $  (2,418,717)
                                  =============   =============   =============
Shares used to compute
     basic and diluted loss
     per common share:
   Weighted-average common shares   130,782,481     106,687,447      68,735,272
                                  =============   =============   =============
Basic and diluted loss per
   common share                   $       (0.12)  $       (0.05)  $       (0.04)
                                  =============   =============   =============

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

SFAS No. 133, "Accounting For Derivative Instruments and Hedging Activities" (as
amended by SFAS Nos.  137, 138, 140, 141 and 145),  establishes  accounting  and
reporting  standards for derivative  instruments,  including certain  derivative
instruments embedded in other contracts, and for hedging activities. It requires
that an entity  recognize all derivatives as either assets or liabilities on the
balance  sheet at their fair value.  The Company has no  derivatives  or hedging
activities as of June 30, 2004 or June 30, 2003.

                                      F-33

<PAGE>

COMPREHENSIVE INCOME

SFAS No. 130, "Reporting  Comprehensive  Income,"  establishes the standards for
reporting and display of  comprehensive  income and its components in a full set
of  general-purpose  financial  statements.  The  adoption  of SFAS  130 has not
materially impacted the Company's financial position or results of operations.

SEGMENT INFORMATION

SFAS 131, "Disclosures about Segments of an Enterprise and Related Information,"
changed the way public  companies  report  information  about  segments of their
business  in their  annual  financial  statements  and  requires  them to report
selected segment  information in their quarterly reports issued to shareholders.
It also  requires  entity-wide  disclosures  about the  products and services an
entity provides,  the foreign countries in which it holds significant assets and
its major  customers.  At June 30, 2004 and 2003,  the  Company  operates in one
segment, as disclosed in the accompanying consolidated statements of operations.

VARIABLE INTEREST ENTITY

In January 2003, the FASB issued FIN No. 46, "Consolidation of Variable Interest
Entities, an Interpretation of ARB 51." The primary objectives of FIN No. 46 are
to provide  guidance  on the  identification  of entities  for which  control is
achieved through means other than voting rights (variable interest entities,  or
"VIEs"), and how to determine when and which business enterprise (if any) should
consolidate the VIE. This new model for  consolidation  applies to an entity for
which  either:  (a) the equity  investors  do not have a  controlling  financial
interest;  or (b) the equity  investment at risk is insufficient to finance that
entity's activities without receiving additional  subordinated financial support
from other  parties.  In  addition,  FIN No. 46  requires  that both the primary
beneficiary and all other enterprises with a significant  variable interest in a
VIE make  additional  disclosures.  As amended in December  2003,  the effective
dates  of FIN No.  46 for the  Company  are as  follows:  (a) For  interests  in
special-purpose  entities:  the first period ended after  December 15, 2003; and
(b) For all other types of VIEs: the first period ended after March 15, 2004.

The Company is associated with WTI through common ownership; in addition,  until
April 2004 the Company  was a major  customer  of WTI for  software  development
services.  (WTI derived approximately 75% and 98% of their revenue from services
provided to the  Company  for the year ended June 30, 2003 and the seven  months
ended January 31, 2004,  respectively.)  Based on these and other  factors,  the
Company  determined  that, as of January 1, 2004,  (i) WTI is a VIE and (ii) the
Company was its primary beneficiary.  Therefore,  effective January 1, 2004, the
accounts  of WTI were  consolidated  with  those  of the  Company.  For  reasons
explained in Note 5, the accounts of WTI were de-consolidated effective April 1,
2004.

                                      F-34

<PAGE>

SIGNIFICANT RECENT ACCOUNTING PRONOUNCEMENTS

In April 2003,  the FASB issued SFAS No. 149,  "Amendments  of Statement  133 on
Derivative  Instruments  and Hedging  Activities,"  which  amends and  clarifies
financial accounting and reporting for derivative instruments, including certain
derivative  instruments  embedded in other contracts and for hedging  activities
under SFAS No. 133. This  pronouncement is effective for contracts  entered into
or  modified  after June 30,  2003 (with  certain  exceptions),  and for hedging
relationships  designated  after June 30, 2003. The adoption of SFAS No. 149 did
not have a material impact on the Company's consolidated financial statements.

In May 2003,  the FASB issued SFAS No. 150,  "Accounting  for Certain  Financial
Instruments with  Characteristics  of both Liabilities and Equity." SFAS No. 150
establishes  standards  for  how  a  company  classifies  and  measures  certain
financial  instruments with  characteristics of both liabilities and equity, and
is effective for public  companies as follows:  (i) in November  2003,  the FASB
issued  FASB Staff  Position  ("FSP") FAS 150-03  ("FSP  150-3"),  which  defers
indefinitely (a) the measurement and classification guidance of SFAS No. 150 for
all  mandatorily  redeemable   non-controlling  interests  in  (and  issued  by)
limited-life  consolidated  subsidiaries,  and (b)  SFAS No.  150's  measurement
guidance for other types of mandatorily  redeemable  non-controlling  interests,
provided  they  were  created  before  November  5,  2003;  (ii)  for  financial
instruments  entered  into or  modified  after May 31, 2003 that are outside the
scope of FSP 150-3; and (iii)  otherwise,  at the beginning of the first interim
period  beginning  after June 15, 2003. The Company  adopted SFAS No. 150 on the
aforementioned  effective dates. The adoption of this pronouncement did not have
a material impact on the Company's results of operations or financial condition.

In  December  2003,  the FASB  issued a  revision  of SFAS No.  132,  EMPLOYERS'
DISCLOSURES ABOUT PENSIONS AND OTHER POSTRETIREMENT BENEFITS. This pronouncement
("SFAS No. 132-R") expands employers'  disclosures about pension plans and other
post-retirement  benefits, but does not change the measurement or recognition of
such plans  required by SFAS No. 87, No. 88, or No. 106.  SFAS No. 132-R retains
the existing  disclosure  requirements  of SFAS No. 132,  and  requires  certain
additional  disclosures about defined benefit  post-retirement  plans. Except as
described in the  following  sentence,  SFAS No. 132-R is effective  for foreign
plans for fiscal years ending after June 15,  2004;  after the  effective  date,
restatement  for some of the new  disclosures  is required  for  earlier  annual
periods. Some of the interim-period disclosures mandated by SFAS No. 132-R (such
as the components of net periodic benefit cost, and certain key assumptions) are
effective  for foreign  plans for quarters  beginning  after  December 15, 2003;
other interim-period  disclosures will not be required for the Company until the
first  quarter of 2005.  Since the  Company  does not have any  defined  benefit
post-retirement  plans,  the  adoption  of this  pronouncement  did not have any
impact on the Company's results of operations or financial condition.

                                      F-35

<PAGE>

Other significant recent accounting pronouncements issued by the FASB (including
its Emerging  Issues Task Force),  the  American  Institute of Certified  Public
Accountants,  and  the  SEC  are  discussed  elsewhere  in  these  notes  to the
consolidated  financial  statements.  In the opinion of management,  significant
recent accounting  pronouncements  did not or will not have a material effect on
the consolidated financial statements, other than FIN No. 46 as discussed above.

STOCK DIVIDEND

Effective  July 18, 2002,  the  Company's  Board of  Directors  approved a stock
dividend that was accounted for as a  four-for-one  stock split.  All references
throughout these  consolidated  financial  statements and notes to the number of
shares,  per share amounts,  stock  options,  and market prices of the Company's
common stock have been restated to reflect such stock dividend.

EQUITY INSTRUMENTS SUBJECT TO RESCISSION

The Company  accounts for common stock and other equity  instruments that may be
subject  to  rescission  claims at  estimated  fair value  (based on  applicable
measurement criteria) in accordance with the SEC's promulgated  accounting rules
and interpretive  releases.  Since equity instruments  subject to rescission are
redeemable at the holder's  option or upon the occurrence of an uncertain  event
not solely within the Company's control, such equity instruments are outside the
scope  of  SFAS  No.  150 and  its  related  interpretations.  Under  the  SEC's
interpretation  of GAAP,  reporting such claims outside of stockholders'  equity
(as  "mezzanine  equity") is required,  regardless of how remote the  redemption
event may be.

RESTATEMENTS AND RECLASSIFICATIONS

As previously  reported,  the accompanying  June 30, 2003  consolidated  balance
sheet has been restated to reflect equity instruments subject to rescission, and
the  financial  statements  described in Note 11 have been restated as explained
therein.  All  financial  information  included in these  notes to  consolidated
financial  statements  that relates to the quarters ended September 30, 2003 and
December  31, 2003  reflects  (a) the  applicable  adjustments  described in the
amended Form 10-Q's for such  periods,  and (b) the  restatement  of the balance
sheets as of those dates to reflect equity instruments subject to rescission. In
addition,  all  financial  information  included in these notes to  consolidated
financial  statements  for the first  three  quarters  of  fiscal  2003 has been
adjusted as described in Note 9.

As of the effective  date of SFAS No. 150 (see above),  management  reclassified
the June 30, 2003 balance (approximately  $114,000) of the put liability related
to warrant  issuances from  "mezzanine  equity" to the liability  section of the
Company's consolidated balance sheet.

                                      F-36

<PAGE>

Certain  reclassifications  have  been  made  to the  2003  and  2002  financial
statement presentation to conform to the current year's presentation.

NOTE 2 REVERSE ACQUISITION

On May 20, 2002, Western  International Pizza Corporation  ("WIPC"),  a publicly
traded  company,   entered  into  a  Stock  Exchange  Agreement  (the  "Exchange
Agreement")  with AccuPoll,  Inc ("AccuPoll") in a tax-free share exchange under
Section  368(a)(1)(B)  of  the  Internal  Revenue  Code.  Such  transaction  was
accounted for as a reorganization.  In May 2002, pursuant to a Certificate filed
with the Nevada  Secretary of State,  WIPC effected a one for 2000 reverse split
of all the outstanding shares of its common stock. Thereafter, in May 2002, WIPC
effected  a 1 for 5 reverse  stock  split of all the  outstanding  shares of its
common stock. Pursuant to the Exchange Agreement,  all of the outstanding common
and preferred  stock and  outstanding  warrants of AccuPoll  were  exchanged for
shares of WIPC on a 1 for 1.532  basis.  By  virtue of the  reorganization,  the
stockholders of AccuPoll acquired 75,500,000 restricted common shares of WIPC.

Management  accounted for the  reorganization  as a capital  stock  transaction.
Accordingly,  the  reorganization  was  reported  as a  recapitalization  of the
Company and AccuPoll is considered the acquirer for accounting purposes. Through
its former  stockholders,  the  Company is deemed the  acquirer  for  accounting
purposes because of (a) its majority  ownership of WIPC, (b) its  representation
on WIPC's board of directors, and (c) the executive management positions held by
former officers of AccuPoll.

In  connection  with the reverse  acquisition,  the  Company  issued 4.8 million
shares of restricted  common stock at $0.06 per share  (estimated to be the fair
value of the services  rendered) to a broker.  The related $300,000 was expensed
during the period ended June 30, 2002.

NOTE 3 PURCHASE OF BUSINESS

On April 9,  2003,  the  Company  entered  into an  agreement  with Z prompt  (a
California  corporation) to purchase all of the  outstanding  capital stock of Z
prompt from its  stockholders  in exchange for 8 million shares of the Company's
restricted  common stock.  The primary reason for this purchase was to acquire a
nationwide network of qualified  computer hardware  technicians who could assist
with the  maintenance of the AccuPoll  Ballot Buddy product -  specifically  its
integrated printer.

Additionally,  the Company was required to settle an outstanding promissory note
of Z prompt in the principal amount of approximately $400,000 that was held by a
former  stockholder  of Z prompt,  in exchange for 533,000  shares of restricted
common  stock of the  Company.  The  Company  advanced  Z  Prompt  approximately
$144,000 in connection with the acquisition; such

                                      F-37

<PAGE>

advances were initially  recorded as deferred  acquisition  costs because of the
contingency described in the following paragraph.

The agreement between AccuPoll and the Z prompt  stockholders  provided that the
transaction could be rescinded by the former Z prompt shareholders if AccuPoll's
electronic  voting  system was not certified by Wyle Labs by September 30, 2003.
Such certification was obtained on October 31, 2003;  accordingly,  the Z prompt
acquisition was recorded for accounting purposes in November 2003.

Based on an independent valuation, the estimated fair value of AccuPoll's common
stock issued for the Z prompt acquisition  approximated $1.8 million ($0.213 per
common share).  Among other factors,  the valuation  utilized  information  from
then-recent   issuances  of  the  Company's   common  stock  in   equity-raising
transactions.

The purchase price was allocated to the business acquired based on the estimated
fair value of the assets acquired and liabilities assumed, as follows:

                        Assets        $   183,329
                        Goodwill        2,542,752
                        Liabilities      (912,819)
                                      -----------
                                      $ 1,813,262
                                      ===========

The  results  of  operations  of Z  prompt  are  included  in  the  accompanying
consolidated financial statements from November 1, 2003. The following pro forma
summary presents condensed consolidated results of operations as if Z prompt had
been acquired as of the beginning of the years ended June 30, 2004 and 2003:

                             YEAR ENDED JUNE 30
                            2004           2003
                        -------------   -------------
Net loss                $(14,043,675)   $ (5,761,013)
                        =============   =============
Loss per common share   $      (0.11)   $      (0.05)
                        =============   =============

The above amounts are based upon certain  assumptions  and estimates,  which the
Company  believes are  reasonable.  The pro forma  results of  operations do not
purport to necessarily be

                                      F-38

<PAGE>

indicative  of the  results  which  would have been  obtained  had the  business
combination  occurred as of the beginning of the aforementioned  years, or which
may be obtained in fiscal 2005 and thereafter.

See Notes 6 and 12 for additional information related to Z Prompt.

NOTE 4 CONVERTIBLE NOTE PAYABLE

We have a  convertible  debenture  which at the  discretion  of the  convertible
debenture grantor (the "Grantor") may provide us loans of up to $1,250,000.  The
convertible  debenture  bears  interest at an annual rate of 10% and  originally
matured on June 30,  2004,  but has been  extended to  December  31,  2004.  The
debenture is  convertible on ninety days written notice by Grantor at the lesser
of (i) 50% of the average three lowest  closing  prices for our common stock for
the twenty days  immediately  preceding the  conversion  date or (ii) $0.625 per
share.  At June 30, 2004,  we had borrowed  $872,000  under such  debenture.  In
connection  with such  borrowing,  the  Company  granted a warrant  to  purchase
6,400,000 shares of the Company's  restricted  common stock at an exercise price
of $0.06 per common  share.  The  warrant  vested upon grant and expires in July
2008.  The  Company  recorded  the  relative  fair value of the  warrant and the
beneficial  conversion  feature  as a debt  discount  in  the  total  amount  of
approximately  $200,000.  The  discount  associated  with the  warrant  is being
amortized to interest  expense over the term of the related  debt.  The discount
associated with the beneficial  conversion  feature was  insignificant,  and was
recorded as interest expense upon issuance.

In November  2003,  the Company  issued an additional  warrant to the Grantor to
purchase  6  million  shares  of the  Company's  restricted  common  stock at an
exercise price of $0.06 per share in connection  with a deferral of the maturity
date of the above  convertible  debt instrument to December 2004 and an increase
of the available  borrowings to $1,250,000 from the original amount of $600,000.
The warrant vested upon grant and expires in October 2008. The Company  recorded
the relative fair value of the warrant,  which approximated  $40,000,  as a debt
discount which is being amortized to interest  expense over the extended term of
the convertible debenture.

See Notes 13 and 14 for other convertible notes payable.

NOTE 5 RELATED PARTY TRANSACTIONS

RELATED PARTY PAYABLES

Related party payables approximated $1,487,000 and $875,000 at June 30, 2004 and
2003, respectively, which represent expenses incurred by the Company relating to
the management services agreement entered into with WTI (see below). The amounts
bear no interest and are due within thirty days of receipt.

NOTES PAYABLE TO RELATED PARTIES

During the year ended June 30,  2003,  the  Company  borrowed  an  aggregate  of
$165,000 for working capital  purposes from a related party.  The note calls for
interest at 8% and is due on demand. Per the note agreement,  the Company issued
the creditor  warrants (with an estimated  value of $20,000) to purchase  40,000
shares of restricted  common stock of the Company.  At June 30, 2004,  this note
was paid in full.

                                      F-39

<PAGE>

MASTER SERVICES AGREEMENT

In April  2002,  the  Company  entered  into a Master  Services  Agreement  (the
"Services  Agreement")  whereby WTI provided  substantially  all  non-production
services related to the Company's Voting System.  Under the Services  Agreement,
the Company was  charged  hourly  rates for the  services of WTI  employees  who
worked on developing the computer  software for the Company's Voting System.  In
addition,  the Company paid WTI for all reimbursable expenses, as defined in the
Services Agreement.  The Company was not charged for the use of the office space
or fixed  assets of WTI;  overhead-related  charges  were  included in the basic
hourly rates charged by WTI to the Company. All inventions,  concepts, know-how,
methodologies,  processes, algorithms,  techniques,  compilations,  software and
other works of authorship  of any nature  created or developed by WTI during the
life of the Services Agreement remain the exclusive property of AccuPoll.

WTI, which was incorporated in 1996, is in the business of software  engineering
in various computer languages with an emphasis on Linux/Apache, Sun Solaris, and
Microsoft  NT/Win2K  platforms.  WTI is owned and operated by Dennis  Vadura and
Frank Wiebe. Mr. Vadura is the Company' chief executive officer, a director, and
a principal  stockholder;  Mr. Wiebe is the Company's president and treasurer, a
director,   and  a  principal   stockholder   (collectively   the   "controlling
stockholders").  During the years  ended June 30,  2004 and 2003,  WTI  invoiced
approximately $1,450,000 and $1,300,000,  respectively, to the Company under the
terms of the Services Agreement,  of which  approximately  $1,487,000 is due and
payable at June 30, 2004.

The Services  Agreement  expired on March 31, 2004. Since that date, the Company
has not used the services of WTI because the  software for the Voting  System is
now  substantially  complete;  any additional  computer  programming that may be
necessary  will be  provided by Company  employees  (some of whom are former WTI
employees).  At this time, WTI is virtually a dormant entity with just two minor
customers and only a few employees. Although the Company's June 30, 2004 payable
to WTI is a substantial amount (see the preceding paragraph), there is no intent
to pay this liability in the foreseeable future. Given its minimal operations at
this time, management believes that WTI is no longer dependent for its continued
existence upon additional subordinated financial support from the Company or its
controlling stockholders.  For these reasons,  management has concluded that the
Company  is no  longer  the  primary  beneficiary  of WTI  and,  therefore,  has
de-consolidated the accounts of WTI as of April 1, 2004.

                                      F-40

<PAGE>

NOTE 6 OTHER COMMITMENTS AND CONTINGENCIES

CONSULTING AGREEMENTS

In April 2002, the Company issued  consultants  3,840,000 shares of common stock
at $0.08 per share, valued at $313,344 (based on the market value on the date of
grant), of which $286,000 was included in the June 30, 2002 consolidated balance
sheet as prepaid  consulting  fees and  $27,344 was  expensed  during the period
ended June 30, 2002. The related consulting services were to be provided through
April 2004, and the Company was amortizing the prepaid  consulting fees over the
service period on a straight-line  basis. As part of the same  transaction,  the
Company granted  warrants to purchase 2 million shares of its restricted  common
stock at an exercise price of $0.06 per share,  valued at $500,000 (based on the
Black-Scholes  pricing  model) to such  consultants as a  non-refundable  fee in
exchange for general business consulting services, which the Company recorded in
the accompanying  consolidated statement of operations for the period ended June
30, 2002. During the year ended June 30, 2003, the Company  determined it was no
longer receiving benefit from the consultant and expensed the remaining $286,000
in the accompanying consolidated statement of operations for the year ended June
30, 2003.

LITIGATION

Z prompt

In October  2003, a former  officer and principal  stockholder  of Z prompt (the
"plaintiff")  filed a lawsuit  against  the  Company  and Z prompt  (hereinafter
collectively  referred  to as the  "defendants")  alleging  breach of  contract,
conversion, and fraud relating to (a) the plaintiff's employment contract with Z
prompt,  (b) the merger  agreement  described  in Note 3,  and/or (c) a Z prompt
promissory note (approximately $167,000 plus interest) payable to the plaintiff.
The plaintiff is seeking minimum compensatory damages (including deferred salary
and  collection  of the  promissory  note) of  approximately  $1.6  million,  an
unstated  amount in  excess of $1  million  based on the fraud  allegation,  and
punitive damages according to proof.

In December  2003,  the  defendants  sued the  plaintiff  in a  cross-complaint,
alleging (among other things) breach of good faith/fair dealing covenant, breach
of contract, fraud, misrepresentation, negligence, and breach of fiduciary duty.
The  cross-complainants  are seeking (a)  compensatory  damages of approximately
$1,960,000,  (b) the rescission of all agreements  between the plaintiff and the
defendants (such as the aforementioned  merger agreement),  (c) the cancellation
of all Company stock currently owned by the plaintiff,  and (d) punitive damages
in an unstated amount. This cross-complaint was amended in February 2004 to name
two other former officers/stockholders of Z prompt as additional defendants.

In  January  of 2004,  the  plaintiff  amended  his  complaint  to name  certain
officers/stockholders  of the Company as additional  defendants,  alleging fraud
and interference with contract. This action seeks compensatory damages in excess
of $2 million and punitive damages according to proof.

In June 2004,  the  Bankruptcy  Court  granted  the  plaintiff  relief  from the
automatic  stay  provided by the  Bankruptcy  Code (see Note 12)  regarding  the
litigation described above, and the matter

                                      F-41

<PAGE>

is presently scheduled for trial in Orange County (California) Superior Court in
January  2005.  In the same  action,  Z prompt  agreed to withdraw its motion in
Bankruptcy Court seeking rejection of the executory  contracts  described above.
Management intends to vigorously defend the October 2003 lawsuit described above
(as  amended),  and does not believe that the  plaintiff's  recovery (if any) of
uninsured  damages  will  have  a  material  adverse  effect  on  the  Company's
consolidated financial statements.

                                     GENERAL

From time to time,  the Company may be involved in various  claims,  lawsuits or
disputes arising in the normal operations of its business. Other than the matter
described in Note 10, the Company is not currently  involved in any such matters
which management  believes could have a material adverse effect on the Company's
financial position or results of operations. Exclusive Supply Agreement

In December 2001, the Company entered into an exclusive supply contract expiring
in 2006  with a  vendor  to  manufacture  the  Voting  System  product.  Per the
agreement, if the supplier is unable to produce and deliver on time the required
quantity of  product,  the Company  may obtain the Voting  System  product  from
another supplier.

PROFESSIONAL

The Company has entered into general consulting/lobbying agreements with various
third  parties to provide  services  related  to the  marketing  and sale of the
Company's product in certain cities; such agreements expired through April 2004.
Pursuant to the agreements, the Company will pay commissions on sales within the
various territories, as defined.

During  the year  ended  June 30,  2003,  the  Company  entered  into a Location
Incentives   Agreement  (the  "LIA")  with  the  Amarillo  Economic  Development
Corporation  ("AEDC") to establish the  Company's  customer  service  center and
voting machine repair operations in Amarillo,  Texas.  According to the terms of
the LIA,  the AEDC  paid the  Company  $250,000  upon  execution  of a lease for
facilities in Amarillo.  The funds  advanced under the LIA are to be used solely
for the  operations  in Amarillo.  If the Company does not meet certain  minimum
employment  requirements  (as defined in the LIA),  it will be required to repay
all amounts  advanced.  The Company has recorded the advance in the accompanying
consolidated  balance  sheets in  accounts  payable  and  accrued  expenses.  In
connection with the LIA, the Company granted warrants to purchase 250,000 shares
of its restricted  common stock at an exercise price of $1.04 per share,  valued
at approximately $174,000 based on the Black-Scholes pricing model. The warrants
vested on the grant date, and expire in November 2012.

LEASE COMMITMENTS

The Company rents office space under operating lease  agreements which expire at
various dates through June 30, 2006.  The minimum  annual rent under such leases
approximates $170,000 in fiscal 2005 and $130,000 in fiscal 2006.

                                      F-42

<PAGE>

NOTE 7 STOCKHOLDERS' EQUITY

PREFERRED STOCK

In December 2003, the Company entered into an agreement to issue 8,471 shares of
its cumulative  convertible Series A Preferred Stock ("Series A") and $1,200,000
of  convertible  notes payable in exchange for 3,325,000  shares of free trading
common stock of Material  Technologies,  Inc., a publicly  traded  company whose
common stock is quoted on the  Over-The-Counter  Bulletin Board under the symbol
"MTNA." In attempting to execute such  transaction,  the Company's intent was to
gain access to capital markets through the potential sale of MTNA common stock.

The Company  has not filed a  certificate  of  designation  with  respect to any
series of preferred stock. On May 7, 2004,  management entered into an agreement
whereby the Company  exchanged the 3,325,000  shares of common stock of Material
Technologies,  Inc. for the 8,471 shares of Series A. Accordingly,  as of May 7,
2004, no preferred stock was issued or outstanding. However, the Company remains
liable on the $1.2 million convertible note payable;  see Note 14 for additional
information.

The  accounting  adjustment  for  the  transaction  described  in the  preceding
paragraph  has been  reflected in the  accompanying  June 30, 2004  consolidated
financial  statements of the Company as "loss on disposal of  investment".  This
adjustment  of the  Company's  financial  statements  increased  the  previously
reported net loss for the quarter ended December 31, 2003 by approximately  $1.2
million ($0.01 per common share).

COMMON STOCK

In August 2003, the Company issued 7,000,000  shares of restricted  common stock
as collateral for potential  loan proceeds  approximating  $1,650,000  ("Secured
Note"), less applicable commissions.  The Secured Note accrues interest at 4.5%,
will require quarterly  interest-only payments through maturity, and matures two
years from receipt of proceeds.  As of the date of this filing,  the Company has
not received any proceeds or paid any related commissions.

During the quarter ended March 31, 2004, the Company issued 13,884,534 shares of
restricted common stock in connection with the exercise of warrants for proceeds
of approximately $2.3 million, net of commissions approximating $400,000.

During the quarter  ended March 31,  2004,  the  Company  also issued  1,724,167
shares  of  restricted  common  stock in  connection  with the  conversion  of a
$500,000 note payable plus accrued interest approximating $17,000.

In May 2004,  the  Company  issued  1,960,000  shares  of common  stock to three
different  shareholders,  as a result  of a net  exercise  of  warrants  with an
exercise price of $.0625 per share.

In June 2004,  the  Company  issued  3,105,262  shares of common  stock to three
different  shareholders,  as a result  of a net  exercise  of  warrants  with an
exercise price of $.0625 per share.

In June 2004, the Company issued 2,156,250 shares of common stock as a result of
convertible debt of $250,000 which was converted at $.1224 per share.

In July 2004,  the Company  issued  18,406,248  shares of common  stock to seven
different  shareholders,  as a result  of a net  exercise  of  warrants  with an
exercise price of $.0625 per share.

                                      F-43

<PAGE>

WARRANTS

From time to time, the Company issues  warrants  pursuant to various  consulting
agreements

During the year ended June 30, 2003,  the Company  granted  warrants to purchase
250,000 shares of the Company's  restricted common stock at an exercise price of
$0.91 per share valued at $206,000 (based on the Black-Scholes pricing model) to
a consultant for services rendered,  which has been expensed in the accompanying
consolidated  statement  of  operations  for the year  ended June 30,  2003.  In
connection  with the  issuance,  the  warrant  holder  may cause the  Company to
re-purchase  any warrants not  previously  exercised by the warrant holder on or
after  June 2006 for $0.46  per  share.  Accordingly,  a  related  liability  of
$113,750 was recorded in the  accompanying  June 30, 2003  consolidated  balance
sheet, representing the Company's re-purchase liability.

During the  quarter  ended  March 31,  2004,  the  Company  granted  warrants to
purchase 375,000 shares of the Company's  restricted  common stock with exercise
prices ranging from $0.18 to 1.54 per share,  valued at  approximately  $953,000
(based on the Black-Scholes  pricing model), to various consultants for services
to be rendered  through  February 2005.  The Company is amortizing  such expense
over the term of the related services.

During the  quarter  ended  March 31,  2004,  the  Company  granted  warrants to
purchase  11,346,180  shares  of the  Company's  restricted  common  stock  with
exercise  prices ranging from $0.12 to $1.00 per share.  These  warrants  vested
upon grant, and are exercisable through March 2009. Such warrants were issued in
connection  with equity  fund-raising  activities and,  accordingly,  no related
expense was reported in the accompanying consolidated financial statements.

                                      F-44

<PAGE>

A summary of changes in warrants during each period is presented below:

                                Weighted Average

                                              Warrants       Exercise Price
                                         ----------------    -----------------
Balance, August 9, 2001 (Inception)                   --        $          --
Warrants granted                              34,512,804                 0.08
Warrants exercised                            (9,901,316)               (0.11)
Warrants granted                              15,340,813                 0.29
Warrants exercised                            (4,393,886)               (0.11)
Warrants cancelled                            (3,972,000)               (0.25)
                                         ----------------    -----------------
Balance, June 30, 2003                        31,586,415               $ 0.15
                                         ================    =================
Warrants granted                              52,681,292                 0.48
Warrants exercised                           (21,067,794)               (0.22)
Warrants cancelled                                     -                    -
                                         ----------------    -----------------
Balance, June 30, 2004                        63,199,913               $ 0.40
                                         ================    =================
Warrants exercisable at June 30, 2004         63,199,913               $ 0.40
                                         ================    =================

Per share values at grant date of         Weighted Average    Weighted Average
warrants issued during fiscal 2004:         Fair Value         Exercise Price
                                         ----------------    -----------------
Less than fair market value                       $ 0.72               $ 1.55
                                         ================    =================
Equal to fair market value                        $ 0.87               $ 1.54
                                         ================    =================
Greater than fair market value                    $ 1.39               $ 0.25
                                         ================    =================

         The  following  table  summarizes   information   related  to  warrants
outstanding at June 30, 2004:

<TABLE>
<CAPTION>
                                            Warrants Outstanding                                    Warrants Exercisable
                     -------------------------------------------------------------------     ---------------------------------
                                             Weighted Average          Weighted Average                       Weighted Average
   Exercise Price          Number       Remaining Contractual Life      Exercise Price        Number           Exercise Price
------------------------------------------------------------------------------------------------------------------------------
<S>                        <C>                       <C>                <C>                   <C>             <C>
    $0.01 - $0.08          33,145,366                4.66               $      0.06           33,145,366      $       0.06
    $0.12 - $0.25           8,828,992                7.59                      0.17            8,828,992              0.17
    $0.26 - $0.50           4,239,428                5.14                      0.36            4,239,428              0.36
    $0.75 - $0.90           7,313,157                0.25                      0.76            7,313,157              0.76
    $1.00 - $1.40           9,672,970                4.63                      1.52            9,672,970              1.52
                          ----------------------------------------------------------------------------------------------------
                           63,199,913                4.68               $      0.40           63,199,913      $       0.40
</TABLE>

                                      F-45

<PAGE>

         The following  outlines the significant  assumptions  used to calculate
the estimated  fair value  information  presented  utilizing  the  Black-Scholes
pricing model:

                                  Year Ended       Year Ended       Period Ended
                                 June 30, 2004    June 30, 2003    June 30, 2002
                               ----------------  ---------------  --------------
Discount rate                        2.00%            3.50%            3.50%
Volatility                         72% - 112%      105% - 170%        0% - 51%
Expected life in years                 3                3                1
Expected dividend yield               --               --               --
                               ----------------  ---------------  --------------

STOCK OPTIONS

From time to time, the Company issues non-plan stock options pursuant to various
agreements and other compensatory arrangements to employees and third parties.

A summary of changes in stock options during each year is presented below:

                                                         Weighted average
                                          Stock Options   Exercise Price
                                          -------------   ---------------
Balance, August 9, 2001 (Inception)                   -     $          -
Options granted                               6,780,000              0.31
Options exercised                                     -                -
Options cancelled                                     -                -
                                          -------------   ---------------
Balance, June 30, 2002                        6,780,000              0.31
Options granted                               5,670,000              0.94
Options exercised                                     -                 -
Options cancelled                                     -                 -
                                          -------------   ---------------
Balance, June 30, 2003                       12,450,000     $        0.60
Options granted                                 600,000              1.54
Options exercised                              (550,000)             0.51
Options cancelled                                     -                 -
                                          -------------

Balance, June 30, 2004                       12,500,000     $        0.65
                                          =============   ===============

Options exercisable at June 30, 2004          9,117,500     $        0.64
                                          =============   ===============

                                      F-46

<PAGE>

Per share values at grant date of      Weighted Average  Weighted Average
options issued during fiscal 2004:         Fair Value      Exercise Price
                                       ----------------  ----------------
   Less than fair market value                      N/A               N/A
                                       ================  ================
   Equal to fair market value          $           0.74  $           1.54
                                       ================  ================
   Greater than fair market value                   N/A               N/A
                                       ================  ================

The following table summarizes information related to options at June 30, 2004:

<TABLE>
<CAPTION>
                                         Options Outstanding                          Options Exercisable
                         ----------------------------------------------------     ---------------------------
                                        Weighted Average
                                      Remaining Contractual   Weighted Average               Weighted Average
        Exercise Price      Number            Life             Exercise Price     Number      Exercise Price
-------------------------------------------------------------------------------------------------------------
<S>                       <C>                 <C>               <C>             <C>          <C>
             $0.31         6,480,000          7.92               $   0.31       4,500,000    $    0.45
             $0.91         5,160,000          8.97                   0.91       3,982,500         1.21
             $1.50           260,000          1.61                   1.50         260,000         1.50
             $1.54           600,000          8.44                   1.54         375,000         0.24
                         -----------------------------------------------------------------------------------
Total                     12,500,000          8.25               $   0.68       9,117,500    $    0.64
                         -----------------------------------------------------------------------------------
</TABLE>

The  following  outlines  the  significant  assumptions  used to  calculate  the
estimated fair value information  presented utilizing the Black-Scholes  pricing
model:

                                Year Ended     Year Ended     Period Ended
                              June 30, 2004  June 30, 2003     June 30, 2002
                              -------------  -------------  ----------------
Discount rate                     2.00%             3.50%           3.50%
Volatility                         72%               170%          0% - 51%
Expected life in years              3                 3               3
Expected dividend yield             --                --              --
                              -------------  -------------  ----------------

                                      F-47

<PAGE>

NOTE 8 INCOME TAXES

Income tax expense,  all current, for the years ended June 30, 2004 and 2003 and
the period from August 9, 2001  (Inception)  through June 30, 2002 differed from
the amounts  computed by applying the U.S. Federal income tax rate of 34 percent
to the loss before income taxes as a result of the following:

<TABLE>
<CAPTION>
                                                      2004           2003           2002
                                                   -----------    -----------    -----------
<S>                                                <C>            <C>            <C>
Computed "expected" tax benefit                    $(4,756,000)   $(1,649,000)   $  (801,000)
Adjustment in income taxes resulting from:

    Change in valuation allowance                    4,334,000      1,891,000        921,000
    Other                                                   --            800            800
    State and local income taxes, net of federal      (439,600)      (242,000)      (120,000)
    Goodwill Impairment                                864,000             --             --
                                                   -----------    -----------    -----------
                                                   $     2,400    $       800    $       800
                                                   ===========    ===========    ===========
</TABLE>

The tax effects of temporary  differences that give rise to significant portions
of the deferred tax assets at June 30, 2004, 2003 and 2002 are presented below:

                                          2004          2003           2002
                                      -----------   -----------   -----------
Net Operating Losses                    4,052,000       199,000        86,000
Stock-based Compensation                1,327,000     1,327,000       456,000
Start-up Costs                          1,142,000     1,142,000       309,000
Loss on Investments                       480,000            --            --
Capitalized research and development       70,000        70,000        70,000
Other                                      75,000        74,000            --
                                      -----------   -----------   -----------
Deferred tax asset                      7,146,000     2,812,000       921,000
Less: Valuation Allowance              (7,146,000)   (2,812,000)     (921,000)
                                      -----------   -----------   -----------
Net deferred tax asset                         --            --            --
                                      ===========   ===========   ===========

As of June 30,  2004,  the Company  had tax net  operating  loss carry  forwards
("NOLs") of approximately  $10,800,000 and $6,400,000 available to offset future
taxable  income for Federal and State  purposes,  respectively.  The Federal and
State carry forwards expire in varying amounts through 2024. Effective September
11, 2002,  pursuant to California  revenue and tax code section 24416.3,  no net
operating  loss  deduction  will be allowed for any taxable year beginning on or
after January 1, 2002, and before January 1, 2004. For any suspended losses, the
carry  forward  period is extended by one year for losses  incurred in tax years
beginning on or after January 1, 2002,  and before  January 1, 2003;  and by two
years for losses incurred in taxable years beginning before January 1, 2002.

                                      F-48

<PAGE>

Due to the change in ownership  provisions of the Internal  Revenue Code Section
382,  net  operating  loss  carry  forwards  for  Federal  and State  income tax
reporting  purposes  are  subject to annual  limitations.  Should an  additional
change in ownership  occur,  net operating loss carry forwards may be limited as
to their use in future years.

In 2004,  2003 and 2002, the Company  concluded that a full valuation  allowance
against its net deferred tax assets was  appropriate.  SFAS 109 requires  that a
valuation allowance must be established when it is more likely than not that all
or a portion  of  deferred  tax  assets  will not be  realized.  In making  such
determination,  a review of all available positive and negative evidence must be
considered, including scheduled reversal of deferred tax liabilities,  projected
future  taxable  income,   tax  planning   strategies,   and  recent   financial
performance.  The accounting  guidance  further states that forming a conclusion
that a valuation  allowance  is not needed is  difficult  when there is negative
evidence such as cumulative losses in recent years. As a result of the Company's
recent cumulative losses, the Company concluded that a full valuation  allowance
should be recorded in 2004, 2003 and 2002.

NOTE 9 SIGNIFICANT FOURTH QUARTER ADJUSTMENTS - FISCAL 2003

In June  2003,  the  Company  recorded  an  adjustment  to  capitalize  software
development  costs of  approximately  $436,000 that were previously  expensed in
earlier  fiscal 2003  quarters  relating to WTI.  The  allocation  of such costs
incurred from a related party (see Note 5) was adjusted in the fourth quarter of
fiscal 2003. The effect of this adjustment on the first three quarters of fiscal
2003 is summarized below:

                                                 QUARTER ENDED
                                     9/30/02        12/31/02        3/31/03
                                   -----------    -----------    -----------
Net loss, as previously reported   $  (738,639)   $(1,683,613)   $(1,115,187)
Adjustment described above             162,315        157,725        115,775
                                   -----------    -----------    -----------
Net loss, as restated              $  (576,324)   $(1,528,888)   $  (999,412)
                                   ===========    ===========    ===========

Such  adjustment  had no effect on the  basic/diluted  (rounded) loss per common
share for any of the first three quarters of fiscal 2003.

NOTE 10 EQUITY INSTRUMENTS SUBJECT TO RESCISSION

The Company may be subject to possible claims for rescission with respect to the
sale or other  issuances of certain  common  stock,  options and  warrants.  The
accompanying  consolidated  balance  sheets reflect an adjustment for the matter
described below.

Approximately  26.6 million  shares of the Company's  common stock,  options and
warrants that were issued or granted in the United States  without  registration
or  qualification  under  federal or state  securities  laws during the two-year
period ended June 30, 2004 may be subject to rescission. The fair value of these
securities was estimated  based on a combination of (a) the selling price of the
common stock on the dates sold, (b) the price per the agreement for stock issued
in conversion  of debt,  (c) the fair value of the stock options and warrants on
their grant dates, and (d) an independent valuation.  Based in part on advice of
counsel,  the fair value of these options and warrants was  estimated  using the
Black-Scholes  option-pricing  model. Based on these measurement  criteria,  the
Company's  potential  liability  directly  associated  with  the  aforementioned
securities  transactions  is estimated to  approximate  $6.2 million  (including
interest) at June 30, 2004 plus legal fees and any fines or penalties that might
be assessed by regulatory agencies.

Based on advice of counsel,  the potential  liability  discussed  above does not
include options to purchase a total of 3.6 million shares of common stock issued
to the Company's  president and to its chief executive officer because these two
individuals  are also principal  stockholders of the Company;  acting  together,
they have the ability to control the Company.  The  estimated  fair value of the
options described in this paragraph (excluding interest) approximated $1,360,000
at June 30, 2004.

Management is unable to determine at this time whether any claim for  rescission
may be filed against the Company;  however,  there can be no assurance that such
claims will not be asserted.

                                      F-49

<PAGE>

In addition,  regulatory  agencies  could launch a formal  investigation  and/or
institute an enforcement proceeding against the Company.

The  ultimate   outcome  of  the  matters   discussed  above  is  not  presently
determinable. Accordingly, management is unable to estimate the total liability,
if any, that the Company may incur as a result of such contingencies. Regardless
of how remote a rescission event may be, GAAP as interpreted by the SEC requires
that  equity  securities  subject  to  rescission  be  reported  outside  of the
stockholders'  equity section of the balance sheet until the applicable statutes
of limitations have expired.  Thus, the Company has reported  approximately $6.2
million as "mezzanine  equity" in the  accompanying  June 30, 2004  consolidated
balance sheet.

Approximately  8.5  million  shares  of the  Company's  common  stock  issued in
connection with the  acquisition of Z prompt,  with an  issuance-date  estimated
fair value of approximately  $1.8 million,  have been excluded from the June 30,
2003 mezzanine equity amount, as the acquisition was not recorded until November
2003 for reasons described in Note 3.

NOTE 11 RESTATEMENT OF STATEMENTS OF OPERATIONS

Subsequent  to the original  issuance of the Company's  June 30, 2003  financial
statements,  it was determined that consulting  services,  for which the Company
had  granted a warrant  to  purchase  1 million  shares of common  stock with an
estimated  fair  value of  $655,000,  had not  been  and will not be  performed.
Therefore,  the accompanying  consolidated statements of operations for the year
ended June 30, 2003 and for the period from Inception through June 30, 2003 have
been  restated.  The effect of such  restatement  was to reduce  the  previously
reported net loss by $655,000 with no effect on (rounded) loss per common share.

NOTE 12. BANKRUPTCY FILING OF WHOLLY-OWNED SUBSIDIARY Z PROMPT

On March 23, 2004 (the  "Petition  Date"),  Z prompt (or the  "Debtor")  filed a
voluntary  petition for relief (the  "Chapter 11 Case") under  Chapter 11 of the
United  States  Bankruptcy  Code (the  "Bankruptcy  Code") in the United  States
Bankruptcy  Court  for the  Central  District  of  California  (the  "Bankruptcy
Court"). Since the Petition Date, Z prompt has conducted its business activities
as a debtor-in-possession under the Bankruptcy Code.

As a result of the Chapter 11 Case, the realization of Z prompt's assets and the
liquidation of its  liabilities  are subject to  uncertainty.  In the Chapter 11
Case, a substantial portion of the Debtor's  liabilities as of the Petition Date
is  subject  to  compromise  or  other  treatment  under  a  confirmed  plan  of
reorganization.  Generally,  actions to enforce or otherwise effect repayment of
all  pre-Chapter 11  liabilities  (as well as any pending  litigation,  absent a
stipulation to the contrary - see the "Z prompt  litigation"  section of Note 6)
against the Debtor are stayed while Z prompt operates as a  debtor-in-possession
during bankruptcy proceedings. Schedules have been filed by the Debtor with

                                      F-50

<PAGE>

the Bankruptcy  Court setting forth the liabilities  (approximately  $1 million)
and assets of Z prompt as of the Petition Date based on its unaudited accounting
records.  Any differences between amounts reflected in such schedules and claims
filed by creditors will be investigated, and will either be amicably resolved or
adjudicated by the Bankruptcy Court. The ultimate amount and settlement terms of
such liabilities are not presently determinable.

Financial  accounting  and  reporting  during a Chapter 11 case are  governed by
Statement   of  Position   No.   90-7,   FINANCIAL   REPORTING  BY  ENTITIES  IN
REORGANIZATION  UNDER THE  BANKRUPTCY  CODE  ("SOP  No.  90-7").  For  financial
reporting purposes, Z prompt's pre-petition  liabilities and obligations,  which
may be  subject to  settlement  or  otherwise  dependent  on the  outcome of the
Chapter 11 case, have been segregated and classified as "liabilities  subject to
compromise" in the accompanying  June 30, 2004  consolidated  balance sheet (see
Note 17). Z prompt did not have any significant  reorganization items (income or
expense)  during the year ended June 30, 2004.  Certain  additional  disclosures
including  (a) claims not subject to  reasonable  estimation of the amount to be
allowed and (b) any significant difference between reported interest expense and
stated contractual  interest will be provided (as required by SOP No. 90-7) when
such amounts are determinable and/or when the related transactions occur.

Management  continues to conduct the business  activities  of Z prompt under the
supervision  of the  Bankruptcy  Court and,  among other  things,  the Debtor is
granted a 120-day  exclusive  right to propose a plan of  reorganization,  which
must be approved by the  creditors  and confirmed by the  Bankruptcy  Court.  In
accordance  with the Bankruptcy  Code, an automatic stay provides that creditors
of Z prompt and other parties in interest are prevented  from seeking  repayment
of pre-petition debts. Additionally, unless otherwise approved by the Bankruptcy
Court, the Debtor must refrain from paying any pre-petition indebtedness.

On  April  20,  2004,  the  Bankruptcy  Court  approved  a  debtor-in-possession
financing  arrangement  whereby Z prompt is  permitted  to  obtain  credit  from
AeroFund  Financial,  Inc.  of no more than  $500,000  through  the sale  and/or
factoring of its  post-petition  accounts  receivable;  this credit  facility is
collateralized by a security interest in such accounts receivable.

Although  legal fees and other  administrative  expenses  to complete Z Prompt's
bankruptcy  proceedings  may  be  significant,   they  are  not  susceptible  of
reasonable  estimation at this time. Z prompt could decide to reject some or all
of its lease obligations in the Chapter 11 Case. This action may result in lease
rejection  claims  pursuant to the  Bankruptcy  Code;  any such claims  would be
adjudicated by the Bankruptcy Court.

An important element in successfully reorganizing the Debtor will be the ability
to restructure  certain  liabilities in order to reduce indebtedness and provide
funding for  operations.  As part of the process of attempting to reorganize,  Z
prompt intends to pursue various financing

                                      F-51

<PAGE>

alternatives that may be available,  although there can be no assurance that the
Debtor will be able to successfully  implement any such  alternatives.  Though Z
prompt  intends to make efforts to increase its revenues to improve  operations,
it is possible that losses will continue for the foreseeable future and that the
Debtor will require  additional funding and financial support from a third party
and/or its parent  company.  There can be no assurance that any such  additional
financing will be available on acceptable  terms, that such funds (if available)
would  enable  Z prompt  to  continue  operating,  or that  the  Debtor  will be
successful in increasing its revenues.  In addition,  there is no assurance that
the creditors and the Bankruptcy Court will approve a  reorganization  plan that
will allow Z prompt to survive.

The Company's March 23, 2004 receivable from Z prompt (which has been eliminated
in  consolidation,  and therefore is not included in the Note 18  disclosure) of
approximately $275,000 is subject to compromise in the bankruptcy proceedings.

Condensed  financial  information  of Z prompt  as of June 30,  2004 and for the
period from November 1, 2003 (when the  acquisition  was recorded for accounting
purposes) to June 30, 2004 is presented below.

                                  Z PROMPT INC.
                            BALANCE SHEET (Unaudited)
                                  June 30, 2004

                                     ASSETS

CURRENT ASSETS
      Cash                                                   $     34,010
      Accounts receivable, net                                    254,895
      Inventories                                                  20,667
                                                             ------------
                                                                  309,572
OTHER, net                                                          2,512
                                                             ------------

      TOTAL ASSETS                                           $    312,084
                                                             ============
             LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
      Accounts payable and accrued expenses                  $    301,734
      Loan from parent company                                    620,395
      Deferred revenues                                            74,628
      Liabilities subject to compromise                           732,544
                                                             ------------
      TOTAL LIABILITIES                                         1,729,301
                                                             ------------
STOCKHOLDERS' DEFICIT                                          (1,417,217)
                                                             ------------
      TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT            $    312,084
                                                             ============

                                      F-52

<PAGE>

                                  Z PROMPT INC.
                       STATEMENT OF OPERATIONS (UNAUDITED)

                                     EIGHT MONTHS ENDED
                                       JUNE 30, 2004
                                       -------------
NET SALES                              $   1,508,656
COST OF SALES                              1,185,797
                                       -------------
GROSS PROFIT                                 322,859
EXPENSES

      General and administrative             586,011
      Salaries and related                   279,293
      Interest                               128,710
      Loss on disposal of assets              16,648
                                       -------------
                                           1,010,662
                                       -------------
PRETAX LOSS                            $   (687,803)
                                       =============

                                      F-53

<PAGE>

NOTE 13 SUBORDINATED CONVERTIBLE DEBT

In July 2003, the Company  borrowed  $500,000  under a subordinated  convertible
note payable, (the "Subordinated  Convertible Note"), which bears interest at 7%
per annum. All borrowings were due six months from the receipt of proceeds, with
semi-annual  interest payments on the outstanding balance. In December 2003, the
Subordinated  Convertible  Note  was  converted  into  1,666,667  shares  of the
Company's restricted common stock at $0.30 per share.

A BCF approximating $500,000 was recorded during the quarter ended September 30,
2003.  Such discount was amortized to interest  expense  during the three months
ended September 30, 2003, as the  subordinated  convertible note was convertible
upon  issuance.   Since  the  Subordinated   Convertible  Note  was  immediately
convertible,  the entire BCF was  charged to interest  expense in the  Company's
restated financial statements for the quarter ended September 30, 2003.

NOTE 14 CONVERTIBLE NOTES PAYABLE

                             THE NOVEMBER 2003 NOTES

In November 2003, we secured a $5 million dollar revolving  credit facility,  in
the form of two  seven-month  convertible  notes.  The notes bear interest at an
annual  rate of 10% and  originally  matured  on June 30,  2004,  but have  been
extended to December 31, 2004. The notes are  convertible on ninety days written
notice by the  holders  at the  lesser of (i) 50% of the  average  three  lowest
closing  prices for our common stock for the twenty days  immediately  preceding
the conversion  date or (ii) $.0625 per share. At June 30, 2004, we had borrowed
$2,180,000  under such  notes.  Included in this  balance  the Company  borrowed
$1,200,000 in connection  with a transaction  with Material  Technologies,  Inc.
(see Note 7). The Company subsequently  un-wound the Material  Technologies Inc.
transaction  and  expensed  the entire  $1,200,000  as a loss on disposal of the
investment in Material  Technologies  Inc.'s common stock. At June 30, 2004, the
Company  remains  liable for the $1.2  million  convertible  debt as part of the
total borrowings under such notes.

                           OTHER FISCAL 2004 ACTIVITY

As  consideration  for renewing  certain  convertible debt (including the credit
facility  described in the  preceding  paragraph)  and in payment of interest on
such  debt,  the  Company  issued  a total  of  approximately  $1.3  million  of
additional convertible debt during the year ended June 30, 2004.

                                      F-54

<PAGE>

                              THE JANUARY 2004 NOTE

In January 2004, the Company borrowed  $250,000 under a convertible note payable
(the "January  Note"),  which bears  interest at 7% per annum.  All  borrowings,
including interest, were due in July 2004. The January Note was convertible into
restricted common stock of the Company at a rate of $0.12 per share, at any time
at the option of the note holder.  In June 2004,  the January Note was converted
into 2,083,333 shares of the Company's common stock.

A beneficial conversion feature  approximating  $250,000 was recorded during the
quarter ended March 31, 2004, and was expensed upon issuance of the January Note
based on the immediate conversion feature.

NOTE 15 LINE OF CREDIT

Z prompt had a revolving line of credit  agreement (the "Line") with a financial
institution,  which bore interest at 5% per annum. A shareholder of the Company,
who is a former  majority  shareholder of Z prompt,  has guaranteed the Line. At
June 30, 2004, the outstanding  borrowings  under this credit  facility  totaled
$225,000,  which is  included  in  "liabilities  subject to  compromise"  in the
accompanying June 30, 2004 consolidated balance sheet.

NOTE 16 SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

Selected  quarterly  financial  data for each of the  quarters  in the  two-year
period ended June 30, 2004 are presented below.

                                         FOR THE QUARTER ENDED

                          9/30/03         12/31/03        3/31/04       6/30/04
                          -------         --------        -------       -------
Net sales                $     --        $ 361,232      $ 620,140     $ 527,284
Gross profit                   --          218,729         15,568        88,562
Net loss               (1,612,690)      (3,593,022)    (4,282,293)   (5,891,248)
Loss per common share       (0.02)           (0.03)         (0.03)        (0.04)

                                         FOR THE QUARTER ENDED

                          9/30/02         12/31/02       3/31/03       6/30/03
                          -------         --------       -------       -------
Net sales               $      --       $       --      $     --      $     --
Gross profit                   --               --            --            --
Net loss                 (576,324)      (1,528,888)     (999,412)   (1,743,943)
Loss per common share       (0.01)           (0.01)        (0.01)        (0.02)

See the  "Restatements and  Reclassifications"  section of Note 1 for additional
information.

                                      F-55

<PAGE>

NOTE 17 LIABILITIES SUBJECT TO COMPROMISE

The March 23, 2004  balances of Z prompt's  liabilities  that became  subject to
compromise  on that date  (excluding  its  liability to the parent  company) are
approximately as follows:

Accounts  payable and accrued expenses    $ 335,544
Secured line of credit payable (Note 15)    225,000
Note payable to related party               172,000
                                          ---------
         Total                            $ 732,544
                                          =========

NOTE 18 SUBSEQUENT EVENT (UNAUDITED)

NOVEMBER 2004 PRIVATE PLACEMENT

         On  November  4,  2004,  the  company  completed  a  private  placement
transaction  with the same investors  from the First Closing,  pursuant to which
the company sold an aggregate of  6,050,000  shares of common  stock,  3,025,000
Series A Warrants,  3,025,000  Series B Warrants and 3,025,000 Series C Warrants
(the "Second  Closing").  The company received gross proceeds totaling $605,000.
For each two shares of common stock, the company issued investors one A Warrant,
one B Warrant and one C Warrant. Each two shares and three warrants were sold at
a  total  price  of  $0.20.  The  private   placement  was  deemed  exempt  from
registration  requirements  under Rule 506 of Regulation D of the Securities Act
of 1933. We are  registering in this offering  6,050,000  shares of common stock
and 9,075,000 shares issuable upon exercise of these outstanding warrants, which
includes  a good  faith  estimate  of  shares  of common  stock to  account  for
antidilution and price protection adjustments.

         The Second Closing triggered certain repricing adjustments to the terms
of the First Closing.  Accordingly, the purchase price for the First Closing was
adjusted  to $0.20 for each two shares  and three  warrants  that were sold.  As
adjusted,  the company IS obligated to issue an additional  12,832,552 shares of
common  stock,  6,233,501  Series A Warrants,  6,233,501  Series B Warrants  and
6,233,501 Series C Warrants.  For the First Closing,  the company is registering
in this  offering  16,498,999  shares of  common  stock  and  24,748,499  shares
issuable  upon  exercise of warrants,  which  includes a good faith  estimate of
shares of common stock to account for further  antidilution and price protection
adjustments.  The terms of the Series A Warrants,  the Series B Warrants and the
Series C Warrants, as adjusted are as follows:

         The company agreed to file with the Securities and Exchange  Commission
not later than 30 days after the closing date of the Second  Closing,  and cause
to be effective within 120 days after the closing date of the Second Closing,  a
registration  statement  "rs" in order to  register  the shares of common  stock
issued to the investors and the shares  underlying  the warrants,  including the
shares  issuable upon exercise of warrants  issued to the  placement  agent.  In
addition,  on one  occasion,  for a period  commencing 91 days after the closing
date of the Second Closing,  but not later than two years after the closing date
of the Second  Closing,  upon written request of the holders of more than 50% of
the shares and warrant  shares  actually  issued upon exercise of warrants,  the
company is required to prepare and file a registration statement. The A Warrants
expire 150 days from the date the rs is declared effective by the Securities and
Exchange  Commission  and are  exercisable  at $0.12 per  share.  The B Warrants
expire four years after the date the rs is declared  effective by the Securities
and Exchange  Commission and are exercisable at $0.15 per share.  The C Warrants
expire three years after the date the rs is declared effective by the Securities
and Exchange Commission and are exercisable at $0.50 per share.

         The company may call the  warrants  beginning 30 trading days after the
effective date of the rs and ending 30 trading days before the expiration of the
warrants.  A call  notice may be given by the  company  for the A Warrants  only
within  five  trading  days  after the common  stock has had a closing  price as
reported for the principal market of $0.24 or higher for 15 consecutive  trading
days.  A call notice may be given by the company for the B Warrants  only within
five trading days after the common stock has had a closing price as reported for
the principal market of $0.30 or higher for 15 consecutive  trading days. A call
notice may be given by the company for the C Warrants  only within five  trading
days  after  the  common  stock  has had a  closing  price as  reported  for the
principal market of $1.00 or higher for 15 consecutive trading days.

         Beginning  November 4, 2004 and until the rs has been effective for 150
days,  the  investors  must be given at least ten

                                      F-56

<PAGE>

business days prior written notice of any proposed sale by the company of common
stock or other  securities or debt  obligations  except in  connection  with (a)
employee stock options or compensation  plans, (b) documented legal fees, or (c)
the company  already  issued and  outstanding  shares of common  stock as of the
closing  date of the Second  Closing.  Such  proposed  sales are  referred to as
"excepted issuances."

         Other  than  the  excepted   issuances,   if  at  any  time  until  the
registration statement has been effective for 150 days, the company offer, issue
or agree to issue any common stock or securities convertible into or exercisable
for  shares  of  common  stock  (or  modify  any of the  foregoing  which may be
outstanding at any time prior to the closing date of the Second  Closing) to any
person or entity at a price per share or conversion or exercise  price per share
which shall be less than $0.10,  without the consent of each investor,  then the
company is  required  to issue,  for each such  occasion,  additional  shares of
common stock to each  investor so that the average per share  purchase  price of
the shares of common stock and the warrants  issued to the investor (of only the
common  stock or warrant  shares  still owned by the  investor) is equal to such
other lower price per share.  For purposes of this issuance and adjustment,  the
issuance of any security carrying the right to convert such security into shares
of common stock will result in the issuance of the  additional  shares of common
stock upon the issuance of such convertible security,  warrant,  right or option
and again upon any subsequent  issuances of shares of common stock upon exercise
of such  conversion or purchase rights if such issuance is at a price lower than
$0.10.

         The exercise price of the warrants is also subject to adjustment in the
event we effect a  reorganization,  consolidation or merger,  or transfer all or
substantially  all of our properties or assets.  Also, until the expiration date
of the  warrants,  if the company  issue any common  stock  other than  excepted
issuances,  prior to the complete  exercise of the warrants for a  consideration
less than the warrant exercise price that would be in effect at the time of such
issue, then the exercise price shall be reduced to such other lower issue price.
For purposes of this adjustment, the issuance of any security or debt instrument
carrying the right to convert such security or debt instrument into common stock
or of any warrant,  right or option to purchase  common stock shall result in an
adjustment  to the  exercise  price  upon the  issuance  of the  above-described
security, debt instrument, warrant, right, or option.

                                      F-57

<PAGE>

                                      UP TO
                                   105,818,544
                                    SHARES OF
                                  COMMON STOCK

                                       OF

                             ACCUPOLL HOLDING CORP.

                                   PROSPECTUS

                 The date of this prospectus is __________, 2004



<PAGE>

                                     PART II

                     INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13.  OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

         The  following  table  sets  forth  an  itemization  of  all  estimated
expenses,  all of  which we will  pay,  in  connection  with  the  issuance  and
distribution of the securities being registered:

                      NATURE OF EXPENSE                        AMOUNT
                      -----------------                     -----------
                      SEC Registration fee                  $ 1,170.76
                      Accounting fees and expenses           45,000.00*
                      Legal fees and expenses                40,000.00*
                                                            -----------
                                            TOTAL           $86,170.76*
                                                            ===========
                      * Estimated

ITEM 14.  INDEMNIFICATION OF DIRECTORS AND OFFICERS.

         Our Bylaws  authorize us to indemnify  any person who was or is a party
or is threatened  to be made a party to any  threatened,  pending,  or completed
action,  or suit by reason  of the fact  that he or she is or was our  director,
officer,  employee, or agent, or is or was serving at our request as a director,
officer, employee, or agent of another corporation,  partnership, joint venture,
trust  or  other  enterprise,  against  expenses  (including  attorneys'  fees),
judgments,  fines,  and  amounts  paid in  settlement  actually  and  reasonably
incurred by him or her in connection  with any such action,  suit or proceeding,
if he or she acted in good faith and in a manner he or she  reasonably  believed
to be in or not opposed to our best interests, and, with respect to any criminal
action or proceeding,  had no reasonable cause to believe his or her conduct was
unlawful. The termination of any action, suit, or proceeding by judgment, order,
settlement,  conviction,  or upon a plea of nolo  contendre  or its  equivalent,
shall not, of itself,  create a presumption  that the person did not act in good
faith  and in a  manner  which  he or she  reasonably  believed  to be in or not
opposed  to our best  interests,  and with  respect  to any  criminal  action or
proceeding,  he or she had  reasonable  cause to believe that his or her conduct
was unlawful.  No indemnification may be made in respect of any claim, issue, or
matter as to which such a person has been  adjudged to be liable for  negligence
or  misconduct in the  performance  of his or her duty to us, unless and only to
the extent that the court in which the action or suit was brought  determines on
application  that,  despite the  adjudication  of  liability  but in view of all
circumstances  of the case,  the person is fairly  and  reasonably  entitled  to
indemnity for such expenses as the court deems proper.

         To the extent that a  director,  officer,  employee,  or agent has been
successful  on the  merits  or  otherwise  in  defense  of any  action,  suit or
proceeding,  or in defense of any claim,  issue,  or matter  therein,  he or she
shall be indemnified against expenses  (including  attorneys' fees) actually and
reasonably  incurred  by  him  or  her  in  connection   therewith.   Any  other
indemnification  shall be made upon a determination that  indemnification of the
officer, director,  employee, or agent is proper in the circumstances because he
or she has met the applicable  standard of conduct set forth in our Bylaws. Such
determination  shall be made either: (i) by our Board of Directors by a majority
of a quorum consisting of directors who were not parties to such action, suit or
proceeding;  (ii) by independent legal counsel on a written opinion; or (iii) by
our  shareholders  by a majority vote of a quorum of shareholders at any meeting
duly called for such purpose.

         By its terms, the  indemnification  provided by our Bylaws shall not be
deemed exclusive of any other indemnification granted under any provision of any
statute,  in our Articles of Incorporation,  in our Bylaws,  agreement,  vote of
shareholders or  disinterested  directors,  or otherwise,  both as to his or her
official  capacity  and as to action in  another  capacity  while  holding  such
office,  and shall  continue  as to a person  who has  ceased to be a  director,
officer,  employee,  or agent,  and shall  inure to the benefit of the heirs and
legal representatives of such a person.

         We are authorized by our Bylaws to pay expenses incurred of a director,
officer,  employee or agent in  defending a civil or  criminal  action,  suit or
proceeding  in  advance  of the  final  disposition  of such  action,  suit,  or
proceeding  upon a majority  vote of a quorum of our Board of Directors and upon
receipt of an undertaking by or on behalf of the director,  officer, employee or
agent to repay such amount or amounts unless it is ultimately determined that he
or she is to be indemnified by us.

         Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the  "Act" or  "Securities  Act") may be  permitted  to  directors,
officers or persons  controlling  us pursuant to the  foregoing  provisions,  or
otherwise,  we have been  advised  that in the  opinion  of the  Securities  and
Exchange Commission,  such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable.

                                      II-1

<PAGE>

         Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the  "Act" or  "Securities  Act") may be  permitted  to  directors,
officers or persons  controlling  us pursuant to the  foregoing  provisions,  or
otherwise,  we have been  advised  that in the  opinion  of the  Securities  and
Exchange Commission,  such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable.

ITEM 15.  RECENT SALES OF UNREGISTERED SECURITIES.

         The  following  sets  forth  information  regarding  all  sales  of our
unregistered  securities  during  the past  three  years.  All of the  following
issuances  and sales were exempt from  registration  under  Section  4(2) of the
Securities Act of 1933, as amended, and/or Regulation S, promulgated pursuant to
the Securities Act of 1933, as amended. Except as expressly set forth above, the
individuals  and  entities to whom we issued  securities  as  indicated  in this
section of the registration statement are unaffiliated with us.

COMMON STOCK

         In April  2002,  we issued  612,800  shares  of common  stock to Source
Technologies,  an unrelated  party,  in connection with the assumption of a note
receivable  from Web Tools  International,  Inc.  The common stock was valued at
$50,000 ($0.08 per share),  which is the amount of the assumed receivable.  This
issuance was exempt from registration pursuant to Section 4(2) of the Securities
Act of 1933, as amended.

         In April  2002,  we issued  3,840,000  shares of common  stock to three
consultants  as  non-refundable  retainers  in  exchange  for  general  business
consulting  services.  The  common  stock was valued at  approximately  $307,200
($0.08 per share).  These  issuances were exempt from  registration  pursuant to
Section 4(2) of the Securities Act of 1933, as amended.

         In May 2002, we issued  75,500,000 shares of common stock in connection
with a stock  exchange  with the  holders of all of the  issued and  outstanding
capital  stock of AccuPoll,  Inc., a Delaware  corporation,  regarding a reverse
acquisition transaction.  This issuance was exempt from registration pursuant to
Section 4(2) of the Securities Act of 1933, as amended.

         In May 2002, in connection  with the reverse  acquisition  of AccuPoll,
Inc., we issued  18,639,000 shares of common stock to shareholders of the public
company and various  finders,  including  Aramis  Investments,  LLC, The Glacier
Trust,  The  Viper  Trust,  The  Morpheus  Trust,   Picasso,   LLC  and  various
shareholders  of Web Tools  International,  Inc.  This  issuance was exempt from
registration pursuant to Section 4(2) of the Securities Act of 1933, as amended.

         In August 2002, we issued  208,540  shares of common stock to unrelated
parties in connection with cashless exercises of warrants.  These issuances were
exempt from registration pursuant to Section 4(2) of the Securities Act of 1933,
as amended.

         In August  2002,  we issued  120,000  shares of common  stock valued at
$140,400 (based on the market price on the date of grant) for services rendered.
This  issuance  was exempt from  registration  pursuant  to Section  4(2) of the
Securities Act of 1933, as amended.

         In August 2002, we issued  472,000 shares of common stock in connection
with the exercise of warrants  totaling  $56,640.  This issuance was exempt from
registration pursuant to Section 4(2) of the Securities Act of 1933, as amended.

         In  September  2002,  we  issued  245,120  shares  of  common  stock in
connection  with the exercise of warrants for conversion of accounts  payable in
the amount of $20,200.  This issuance was exempt from  registration  pursuant to
Section 4(2) of the Securities Act of 1933, as amended.

         In  September  2002,  we  issued  462,500  shares  of  common  stock in
consideration  for $125,000  cash.  This  issuance was exempt from  registration
pursuant to Section 4(2) of the Securities Act of 1933, as amended.

         In  October  2002,  we  issued  1,539,278  shares  of  common  stock in
connection  with  the  exercise  of  warrants  for cash  totaling  approximately
$190,000. This issuance was exempt from registration pursuant to Section 4(2) of
the Securities Act of 1933, as amended.

         In December  2002,  we issued  8,500  shares of common  stock valued at
$10,625 (based on the market price on the date of grant) for services  rendered.
This  issuance  was exempt from  registration  pursuant  to Section  4(2) of the
Securities Act of 1933, as amended.

         In  December  2002,  we  issued  816,994  shares  of  common  stock  in
connection  with the  exercise  of warrants  for cash  totaling  $100,000.  This
issuance was exempt from registration pursuant to Section 4(2) of the Securities
Act of 1933, as amended.

                                      II-2

<PAGE>

         In December  2002,  we issued  333,454  shares of common stock for cash
totaling $40,815. This issuance was exempt from registration pursuant to Section
4(2) of the Securities Act of 1933, as amended.

         In December  2002,  we issued  100,000  shares of common stock for cash
totaling $25,000. This issuance was exempt from registration pursuant to Section
4(2) of the Securities Act of 1933, as amended.

         On January  3,  2003,  we issued  20,000  shares of common  stock to an
individual  for services  totaling  $28,000 in reliance upon Section 4(2) of the
Securities Act of 1933, as amended.

         On January 27,  2003,  we issued  40,000  shares of common stock to one
individual  for $10,000 cash ($0.25 per share) in reliance  upon Section 4(2) of
the Securities Act of 1933, as amended.

         On January 28, 2003, we issued  192,750 shares of common stock to seven
individuals in consideration for $23,592.60 cash ($0.1224 per share) in reliance
upon Regulation S under the Securities Exchange Act of 1933, as amended.

         On February 13, 2003,  we issued  95,200  shares of common stock to one
entity in  consideration  for $45,035 cash in reliance upon  Regulation S of the
Securities Act of 1933, as amended.

         On March 3,  2003,  we issued  20,000  shares of common  stock to three
individuals  in  consideration  for  services  rendered,  valued at $24,000,  in
reliance upon Section 4(2) of the Securities Act of 1933, as amended.

         On March 3,  2003,  we  issued  6,667  shares  of  common  stock to one
individual  for services  rendered,  valued at $7,867,  in reliance upon Section
4(2) under the Securities Act of 1933, as amended.

         On March 17,  2003,  we  issued  57,142  shares of common  stock to one
individual for services  rendered,  valued at $59,999,  in reliance upon Section
4(2) under the Securities Act of 1933, as amended.

         On March 26, 2003,  we issued  1,500,000  shares of common stock to one
investor for $375,000  cash ($0.25 per share),  in reliance upon Section 4(2) of
the Securities Act of 1933, as amended.

         On March 26,  2003,  we issued  408,496  shares of common  stock to one
investor for  approximately  $50,000 cash ($0.1224 per share),  in reliance upon
Regulation S of the Securities Act of 1933, as amended.

         On March 26,  2003,  we  issued  10,000  shares of common  stock to two
individuals  in  consideration  for  services  rendered,  valued at $12,000,  in
reliance upon Section 4(2) under the Securities Act of 1933, as amended.

         In April  2003,  we issued  350,000  shares of common  stock  valued at
$364,000 (based on the market price on the date of grant) for services rendered.
This  issuance  was exempt from  registration  pursuant  to Section  4(2) of the
Securities Act of 1933, as amended.

         On  April  1,  2003,  we  issued  7,000  shares  of  common  stock to a
consultant  for  services  valued at  $7,280.  This  issuance  was  exempt  from
registration pursuant to Section 4(2) of the Securities Act of 1933, as amended.

         On June 13,  2003,  we issued  450,000  shares  of  common  stock to an
investor for proceeds of $125,000.  This  issuance was exempt from  registration
pursuant to Section 4(2) of the Securities Act of 1933, as amended.

         Between April 1, 2003 and June 24, 2003, we issued a total of 4,216,213
shares of common  stock to various  investors  outside of the United  States for
cash proceeds of $587,660. These issuance were exempt from registration pursuant
to Regulation S of the Securities Act of 1933, as amended.

         In July 2003,  we issued  10,000 shares of common stock to a consultant
for services valued at $9,000.  This issuance was exempt from registration under
section 4(2) of the Securities Act of 1933, as amended.

         In August 2003, we issued 10,000 shares of common stock to a consultant
for services valued at $11,800. This issuance was exempt from registration under
section 4(2) of the Securities Act of 1933, as amended.

                                      II-3

<PAGE>

         In  September  2003,  we issued  10,000  shares  of  common  stock to a
consultant  for  services  valued at  $12,100.  This  issuance  was exempt  from
registration under section 4(2) of the Securities Act of 1933, as amended.

         In  September  2003,  we issued  50,000  shares  of common  stock to an
investor in exchange for  $25,000.  This  issuance was exempt from  registration
pursuant to Regulation S of the Securities Act of 1933, as amended.

         In  September  2003,  we issued  1,248,252  shares  of common  stock to
various  investors in  connection  with the exercise of warrants in exchange for
$153,000. These issuances were exempt from registration pursuant to Regulation S
of the Securities Act of 1933, as amended.

         Between October 2003 and December 2003, we issued to various  investors
2,740,008  shares of common  stock for an  aggregate  of  $735,885  cash.  These
issuances  were  exempt  from  registration  pursuant  to  Regulation  S of  the
Securities Act of 1933, as amended.

         In December  2003,  we issued  6,250,000  shares of common  stock to an
investor for $750,000.  This issuance was exempt from registration under section
4(2) of the Securities Act of 1933, as amended.

         In  October  2003,  we  issued  530,000  shares  of  common  stock to a
consultant in connection  with a cashless  exercise of a warrant.  This issuance
was exempt from  registration  under section 4(2) of the Securities Act of 1933,
as amended.

         In  October  2003,  we  issued  403,125  shares  of  common  stock to a
consultant in connection  with a cashless  exercise of a warrant.  This issuance
was exempt from  registration  under section 4(2) of the Securities Act of 1933,
as amended.

         In December  2003, we issued 5,000 shares of common stock to Stern & Co
Communications LLC in connection with a settlement agreement.  This issuance was
exempt from  registration  under section 4(2) of the  Securities Act of 1933, as
amended.

         In July  2003,  we  borrowed  $500,000  from  Pan  American  Management
pursuant to a subordinated convertible note. The note accrued interest at 7% per
annum.  In January  2004,  this note, in its  entirety,  was converted  into our
common stock at a conversion  price of $.30 per share.  This issuance was exempt
from registration under section 4(2) of the Securities Act of 1933, as amended.

         In May 2004,  we  issued  1,960,000  shares  of  common  stock to three
different shareholders,  as a result of a net exercise of warrants with a strike
price of $.0625 per share,  for  aggregate  gross  proceeds of  $122,500.  These
issuances were exempt from registration under section 4(2) of the Securities Act
of 1933, as amended.

         In June  2004,  we issued  3,105,262  shares  of common  stock to three
different shareholders,  as a result of a net exercise of warrants with a strike
price of $.0625 per share,  for aggregate gross proceeds of  $194,078.88.  These
issuances were exempt from registration under section 4(2) of the Securities Act
of 1933, as amended.

         In June 2004, we issued 2,156,250 shares of common stock as a result of
the conversion of a $250,000  principal  amount  convertible  debt at $.1224 per
share.  This  issuance was exempt from  registration  under  section 4(2) of the
Securities Act of 1933, as amended.

         On September  13, 2004,  we completed a private  placement  transaction
with 11  accredited  investors,  pursuant  to  which  we sold  an  aggregate  of
3,666,447 shares of common stock, 1,833,227 Series A Warrants,  1,833,227 Series
B Warrants and 1,833,227 Series C Warrants.  We received gross proceeds totaling
$1,649,900.10.  For each two shares of common stock,  we issued  investors one A
Warrant,  one B Warrant  and one C Warrant.  Each two shares and three  warrants
were  sold  at  a  price  of  $0.90.  The  private  placement  was  exempt  from
registration under Rule 506 of Regulation D under the Securities Act of 1933, as
amended.

PREFERRED STOCK

         We have not filed a  certificate  of  designation  with  respect to any
series of preferred  stock.  During the year ended June 30,  2003,  we agreed to
issue a total of 71,529  shares of Series A Preferred  Stock as  collateral  for
secured notes. The parties have  subsequently  agreed to cancel the transaction.
On December  31,  2003,  we agreed to issue  8,471  shares of Series A Preferred
Stock to two  stockholders of record in exchange for 3,325,000  shares of common
stock  of  Material  Technologies,  Inc.  On May 7,  2004,  we  entered  into an
agreement  whereby we exchanged the 3,325,000 shares of common stock of Material
Technologies,   Inc.  for  the  8,471  shares  of  Series  A  Preferred   Stock.
Accordingly,  as of May 7, 2004, no preferred  stock was

                                      II-4

<PAGE>

issued or  outstanding.  All of these  issuances  were exempt from  registration
pursuant to Section 4(2) of the Securities Act of 1933, as amended.

CONVERTIBLE NOTES

         In July 2003, we borrowed  $200,000 under an existing  convertible note
payable,  which bears interest at 10% per annum. The issuance of the convertible
note was exempt from  registration  under Section 4(2) of the  Securities Act of
1933, as amended.

         In  November  2003,  we secured a $5 million  dollar  revolving  credit
facility, in the form of two seven-month  convertible notes. The issuance of the
convertible  notes  was  exempt  from  registration  under  Section  4(2) of the
Securities Act of 1933, as amended.

OPTIONS

         In May 2002,  we granted  options to purchase an aggregate of 6,480,000
shares  of common  stock at an  exercise  price of $0.31  per  share to  various
employees.  These option grants were exempt from registration under Section 4(2)
of the Securities Act of 1933, as amended. .

         In May 2002, we granted  options to purchase  300,000  shares of common
stock at an exercise price of $0.31 per share to Craig A. Hewitt. This grant was
exempt from  registration  under Section 4(2) of the  Securities Act of 1933, as
amended.

         In April 2003, we granted  options to purchase  25,000 shares of common
stock at an exercise  price of $1.02 per share valued at $15,000 to a consultant
for services  rendered.  This grant was exempt from  registration  under Section
4(2) of the Securities Act of 1933, as amended.

         In April 2003, we granted options to purchase  150,000 shares of common
stock at an exercise  price of $1.05 per share valued at $93,000 to a consultant
for services  rendered.  This grant was exempt from  registration  under Section
4(2) of the Securities Act of 1933, as amended.

         In April  2003,  we granted  options to  purchase  1,000,000  shares of
common  stock at an  exercise  price of $0.75 per share  valued at $655,000 to a
consultant for services rendered.  This grant was exempt from registration under
Section 4(2) of the Securities Act of 1933, as amended.

         On June 18,  2003,  we  issued to  various  employees  and  consultants
options to purchase  5,410,000  shares of common  stock at an exercise  price of
$.91 per share. These grants were exempt from registration under Section 4(2) of
the Securities Act, as amended.

         In July 2003, we issued to one individual  options to purchase  600,000
shares of common stock at an exercise  price of $1.54 per share.  This grant was
exempt from  registration  under Section 4(2) of the  Securities Act of 1933, as
amended.

WARRANTS

         From  December  2001 through May 2002,  we issued  warrants to purchase
3,724,292  shares of common stock at an exercise price of $0.08 per share to GTS
Gann  Trading,  ABN Amro,  BSI S.A.,  Lemanik,  Liba Vadura,  Miles  Busby,  and
Righetti Roberta, These issuances were exempt from registration under Regulation
S and/or Section 4(2) of the Securities Act of 1933, as amended.

         From February 2002 through June 2002, we issued warrants to purchase an
aggregate of 533,324 shares of common stock at exercise prices ranging from less
than  $0.001 to $0.06 per share to Dave  Stefano,  Rob De Losa,  ADG and  OTMCP.
These issuances were exempt from registration  under Regulation S and/or Section
4(2) of the Securities Act of 1933, as amended.

         From  April 2002  through  May 2002,  we issued  warrants  to  purchase
3,561,900  shares of common stock at an exercise price of $0.12 per share to ABN
Amro, BSI S.A., Lemanik,  Liba Vadura, Miles Busby, and Righetti Roberta.  These
issuances were exempt from  registration  under Regulation S and/or Section 4(2)
of the Securities Act of 1933, as amended.

         From April 2002  through  June 2002,  we granted  warrants  to purchase
3,332,100  shares of our  restricted  Common Stock at an exercise price of $0.12
per share in connection  with equity fund raising  activities  to ABN Amro,  BSI
S.A.,  Lemanik,  and Righetti Roberta.  The warrants vested on the date of grant
and are  exercisable  through  March  2007.  We  relied  on

                                      II-5

<PAGE>

Regulation S as an exemption from registration under the Securities Act of 1934,
as amended, and under Section 4(2) of the Securities Act of 1933, as amended.

         From May 2002  through  June  2002,  we  issued  warrants  to  purchase
1,761,188  shares of  common  stock at an  exercise  price of $0.06 per share to
Southampton, Ltd. These issuances were exempt from registration under Regulation
S and/or Section 4(2) of the Securities Act of 1933, as amended.

         In May 2002,  we issued  warrants to purchase an aggregate of 2,000,000
shares of common stock at an exercise price of $.25 per share to two individuals
for  consulting  services in reliance upon Section 4(2) of the Securities Act of
1933, as amended.

         In May 2002, we issued warrants to purchase  1,200,000 shares of common
stock at an  exercise  price of $0.25  per  share,  in  connection  with a Shell
transaction,  to seven  individuals  (Thomas J. Howells,  Travis  Jenson,  Baure
Cosgrove,  Duane Jenson, James Doolin,  Jeffrey Jenson, and Leonard Burningham).
These issuances were exempt from registration  under Regulation S and/or Section
4(2) of the Securities Act of 1933, as amended.

         In  August  2002,  we issued  warrants  to  purchase  an  aggregate  of
3,244,000  shares of common stock at exercise prices ranging from $0.12 to $0.25
per share in connection  with equity fund raising  activities.  These  issuances
were exempt from  registration  under  Regulation  S and/or  Section 4(2) of the
Securities Act of 1933, as amended.

         In October  2002,  we issued  warrants  to  purchase  an  aggregate  of
1,320,000  shares of  common  stock at an  exercise  price of $0.06 per share in
connection with equity fund raising activities. These issuances were exempt from
registration  under  Regulation S and/or  Section 4(2) of the  Securities Act of
1933, as amended.

         In October  2002,  we issued  warrants  to  purchase  an  aggregate  of
2,973,937  shares of  common  stock at an  exercise  price of $0.12 per share in
connection with equity fund raising activities. These issuances were exempt from
registration  under  Regulation S and/or  Section 4(2) of the  Securities Act of
1933, as amended.

         In October 2002, we issued warrants to purchase an aggregate of 597,278
shares of common stock to one entity at an exercise  price of $0.24 per share in
connection with equity fund raising activities. These issuances were exempt from
registration  under  Regulation S and/or  Section 4(2) of the  Securities Act of
1933, as amended.

         In October  2002,  we issued  warrants  to purchase  250,000  shares of
common  stock at an  exercise  price of $1.04 per share,  valued at  $174,000 in
connection with the execution of a business  development grant agreement.  These
issuances were exempt from  registration  under Regulation S and/or Section 4(2)
of the Securities Act of 1933, as amended.

         In November 2002, we issued  warrants to purchase  1,000,000  shares of
common  stock at an  exercise  price of $0.25 per share,  valued at  $791,000 in
connection with the execution of a business  development grant agreement.  These
issuances were exempt from  registration  under Regulation S and/or Section 4(2)
of the Securities Act of 1933, as amended.

         In December  2002,  we issued  warrants to  purchase  40,000  shares of
common  stock at an  exercise  price of $1.40 per  share,  valued at  $20,000 in
connection  with the issuance of a note payable in the amount of $50,000.  These
issuances were exempt from  registration  under Regulation S and/or Section 4(2)
of the Securities Act of 1933, as amended.

         In December  2002,  we issued  warrants to  purchase  an  aggregate  of
536,608  shares  of  common  stock at an  exercise  price of $0.12  per share in
connection with equity fund raising activities. These issuances were exempt from
registration  under  Regulation S and/or  Section 4(2) of the  Securities Act of
1933, as amended.

         In December  2002,  we issued  warrants to  purchase  an  aggregate  of
816,994  shares  of  common  stock at an  exercise  price of $0.24  per share in
connection with equity fund raising activities. These issuances were exempt from
registration  under  Regulation S and/or  Section 4(2) of the  Securities Act of
1933, as amended.

         In December  2002,  we issued  warrants to  purchase  an  aggregate  of
1,758,994  shares of common stock at exercise prices of $0.12 to $0.24 per share
in connection with equity fund raising  activities.  These issuances were exempt
from  registration  under Regulation S and/or Section 4(2) of the Securities Act
of 1933, as amended.

         In  January  2003,  we issued  Ascendiant  Capital  Group  warrants  to
purchase 260,000 shares of common stock at an exercise price of $1.50 per share.
The warrants were issued in connection with a consulting agreement for services.
This issuance was exempt from  registration  under  Regulation S and/or  Section
4(2) of the Securities Act of 1933, as amended.

                                      II-6

<PAGE>

         In March 2003,  we issued on  individual  warrants to purchase  700,000
shares of common stock at exercise  prices ranging from $0.25 to $.80 per share.
The warrants were issued in connection with a consulting agreement for services.
These  issuances  were  exempt  from  registration  under  Section  4(2)  of the
Securities Act of 1933, as amended.

         On April 11, 2003, we issued to a consultant, in exchange for services,
a warrant to purchase  25,000  shares of common  stock at an  exercise  price of
$1.02 per share. This issuance was exempt from  registration  under Section 4(2)
of the Securities Act of 1933, as amended.

         On April 21, 2003, we issued to a consultant, in exchange for services,
a warrant to purchase  150,000  shares of common  stock at an exercise  price of
$1.05 per share. This issuance was exempt from  registration  under Section 4(2)
of the Securities Act of 1933, as amended.

         On June 19, 2003, we issued to a consultant,  in exchange for services,
a warrant to purchase  250,000  shares of common  stock at an exercise  price of
$.46 per share. This issuance was exempt from registration under Section 4(2) of
the Securities Act of 1933, as amended.

         On June 27, 2003 we issued to a consultant, in exchange for services, a
warrant to purchase  700,000  shares of common stock for services at an exercise
price of $.75 per share.  This  issuance  was  exempt  from  registration  under
Section 4(2) of the Securities Act of 1933, as amended.

         On June 30, 2003, we issued to a consultant,  in exchange for services,
a warrant  to  purchase  an  aggregate  of 15,000  shares of common  stock at an
exercise  price of $.75 per share.  This  issuance was exempt from  registration
under Section 4(2) of the Securities Act of 1933, as amended.

         Between May 26, 2003 and June 30, 2003, we issued to various  investors
warrants  to  purchase  an  aggregate  of  1,721,996  shares of common  stock at
exercise  prices ranging from $.1224 to $.35 per share in connection with equity
fund  raising  activities.  This  issuance  was exempt from  registration  under
Regulation S.

         Between July 2003 to  September  2003,  we issued to certain  investors
warrants  to  purchase  an  aggregate  of  3,219,969  shares of common  stock at
exercise  prices ranging from $0.12 to $.90 per share in connection  with equity
fund  raising  activities.  This  issuance  was exempt from  registration  under
Regulation S.

         In July 2003, we issued to a consultant a warrant to purchase 6,400,000
shares of common  stock at an exercise  price of $0.0625 per share for  services
valued at $200,000.  This  issuance was exempt from  registration  under Section
4(2) of the Securities Act of 1933, as amended.

         In July 2003,  we issued to a consultant a warrant to purchase  300,000
shares  of common  stock at an  exercise  price of $0.90 per share for  services
valued at $168,000.  This  issuance was exempt from  registration  under Section
4(2) of the Securities Act of 1933, as amended.

         Between October 2003 and December 2003, we issued to various  investors
warrants  to  purchase  an  aggregate  of  4,233,016  shares of common  stock at
exercise  prices  ranging from $.12 to $.35 per share in connection  with equity
fund  raising  activities.  This  issuance  was exempt from  registration  under
Regulation S.

         In  October  2003,  we  issued to a  consultant  warrants  to  purchase
1,000,000  shares of common stock at an exercise  price of $.06 per share.  This
issuance was exempt from  registration  under Section 4(2) of the Securities Act
of 1933, as amended.

         In  October  2003,  we  issued to a  consultant  warrants  to  purchase
5,000,000  shares of common stock at an exercise  price of $.06 per share.  This
issuance was exempt from  registration  under Section 4(2) of the Securities Act
of 1933, as amended.

         In  December  2003,  we issued to a  consultant  warrants  to  purchase
2,264,492  shares of common stock at an exercise price of $1.55 per share.  This
issuance was exempt from  registration  under Section 4(2) of the Securities Act
of 1933, as amended.

         In  December  2003,  we issued to a  consultant  warrants  to  purchase
6,793,478  shares of common stock at an exercise price of $1.55 per share.  This
issuance was exempt from  registration  under Section 4(2) of the Securities Act
of 1933, as amended.

                                      II-7

<PAGE>

         On September  13, 2004,  we completed a private  placement  transaction
with 11  accredited  investors,  pursuant  to  which  we sold  an  aggregate  of
3,666,668 shares of common stock, 1,833,334 Series A Warrants,  1,833,334 Series
B Warrants and 1,833,334 Series C Warrants.  We received gross proceeds totaling
$1,649,900.10.  For each two shares of common stock,  we issued  investors one A
Warrant,  one B Warrant  and one C Warrant.  Each two shares and three  warrants
were  sold  at  a  price  of  $0.90.  The  private  placement  was  exempt  from
registration under Rule 506 of Regulation D under the Securities Act of 1933, as
amended.

         During the  three-month  period ended  September  30,  2004,  we issued
18,806,248  shares of common  stock in  connection  with a cashless  exercise of
warrants. These warrants had originally been issued under a June 2002 consulting
agreement, and the aggregate value of the warrants is approximately  $1,175,000.
The  transaction  was  exempt  from  registration  under  Section  4(2)  of  the
Securities Act of 1933, as amended.

         During  October  2004  Hyde  Investments  converted  $200,000  of their
convertible  debt into 3,200,000  shares of common stock.  The  transaction  was
exempt from registration under Regulation S under the Securities Act of 1933, as
amended.

         In November, 2004, we completed a private placement transaction with 11
accredited investors, pursuant to which we sold an aggregate of 6,050,000 shares
of common stock, and 6,050,000  Series A warrants,  6,050,000 Series B warrants,
and 6,050,000 Series C warrants.  We received gross proceeds totaling  $605,000.
This private  placement  also  triggered a reset to exercise  prices of warrants
sold pursuant to the September 13, 2004 private  placement  described above. The
private  placement was exempt from  registration  under Rule 506 of Regulation D
under the Securities Act of 1933, as amended.

ITEM 16.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

         The  following  exhibits  are  included  as  part  of  this  Form  S-1.
References to "the Company" in this Exhibit List mean AccuPoll  Holding Corp., a
Nevada corporation.

EXHIBIT NUMBER                           DESCRIPTION
--------------------------------------------------------------------------------
2.1               Reorganization  Agreement dated April 9, 2003 between AccuPoll
                  and Z prompt,  Inc.  (Incorporated by reference from Exhibit 1
                  to Form 8-K, filed April 23, 2003)

2.2               Agreement  and Plan of  Reorganization  dated June 30, 2004 by
                  and among AccuPoll Holding Corp., NTSD Acquisition,  Inc., NTS
                  Data  Services  Corp.,  NTS Data  Services,  Inc.,  Matthew M.
                  Biondi and John F. Jennings  (Incorporated  by reference  from
                  Exhibit 10.1 to Form 8-K, filed July 1, 2004).

3.1               Articles of  Incorporation  (Incorporated  by  reference  from
                  Exhibit  3(i) to Form  10-KSB for  fiscal  year ended June 30,
                  2000)

3.2               Amendment to Articles of Incorporation  dated November 4, 1985
                  (Incorporated  by reference  from Exhibit 3(ii) to Form 10-KSB
                  for fiscal year ended June 30, 2000)

3.3               Certificate  of Amendment to Articles of  Incorporation  dated
                  May 2, 2002  (Incorporated  by  reference  from Exhibit 3.3 to
                  Form  10-K/A for the fiscal  year ended June 30,  2004,  filed
                  October 6, 2004)

3.4               Certificate  of Amendment to Articles of  Incorporation  dated
                  May 23, 2002  (Incorporated  by reference  from Exhibit 3.4 to
                  Form  10-K/A for the fiscal  year ended June 30,  2004,  filed
                  October 6, 2004)

3.5               Certificate  of Amendment to Articles of  Incorporation  dated
                  June 2, 2003  (Incorporated  by reference  from Exhibit 3.5 to
                  Form  10-K/A for the fiscal  year ended June 30,  2004,  filed
                  October 6, 2004)

3.6               Bylaws  (Incorporated  by reference to Exhibit  3(iii) to Form
                  10-KSB  for  the  fiscal  year  ended  June  30,  2000,  filed
                  September 8, 2000)

3.7               Amendment  to Bylaws  dated  April 20, 2000  (Incorporated  by
                  reference  to Exhibit  3.7 to Form  10-K/A for the fiscal year
                  ended June 30, 2004, filed October 6, 2004)

4.1               Debenture,  dated June 20, 2003 between AccuPoll and Palisades
                  Holdings,  LLC  (Incorporated by reference from Exhibit 4.1 to
                  Form  10-KSB/A for the fiscal year ended June 30, 2003,  filed
                  June 8, 2004)

4.2               Debenture,  dated  November 20, 2003, by and between  AccuPoll
                  Holding Corp.,  AccuPoll,  Inc. and Hyde Investments,  Ltd, as
                  amended  (Incorporated  by reference from Exhibit 10.1 to Form
                  10-Q/A for the quarter ended December 31, 2003,  filed June 8,
                  2004)

                                      II-8

<PAGE>

EXHIBIT NUMBER                           DESCRIPTION
--------------------------------------------------------------------------------
4.3               Debenture,  dated  November 20, 2003, by and between  AccuPoll
                  Holding  Corp.,  AccuPoll,  Inc. and  Livingston  Investments,
                  Ltd., as amended  (Incorporated by reference from Exhibit 10.1
                  to Form 10-Q/A for the quarter ended December 31, 2003,  filed
                  June 8, 2004)

4.4               Convertible  Note,  dated July 2003,  between AccuPoll and Pan
                  American  Management  (Incorporated  by reference from Exhibit
                  10.1 to Form 10-Q/A for the quarter ended  September 30, 2003,
                  filed June 8, 2004)

4.5               Subscription Agreement,  dated September 8, 2004 (Incorporated
                  by reference from Exhibit 4.1 to Form 8-K, filed September 17,
                  2004)

4.6               Form of  Common  Stock  Purchase  Warrant A  (Incorporated  by
                  reference  from Exhibit 4.2 to Form 8-K,  filed  September 17,
                  2004)

4.7               Form of  Common  Stock  Purchase  Warrant B  (Incorporated  by
                  reference  from Exhibit 4.3 to Form 8-K,  filed  September 17,
                  2004)

4.8               Form of  Common  Stock  Purchase  Warrant C  (Incorporated  by
                  reference  from Exhibit 4.4 to Form 8-K,  filed  September 17,
                  2004)

4.9               Form of Placement  Agent  Warrant  (Incorporated  by reference
                  from Exhibit 4.5 to Form 8-K, filed September 17, 2004)

4.10              Form of Funds Escrow Agreement (Incorporated by reference from
                  Exhibit 4.6 to Form 8-K, filed September 17, 2004)

4.11              Subscription  Agreement,  dated November 4, 2004 (Incorporated
                  by reference  from Exhibit 4.1 to Form 8-K, filed November 10,
                  2004)

4.12              Form of  Common  Stock  Purchase  Warrant A  (Incorporated  by
                  reference  from  Exhibit 4.1 to Form 8-K,  filed  November 10,
                  2004)

4.13              Form of  Common  Stock  Purchase  Warrant B  (Incorporated  by
                  reference  from  Exhibit 4.1 to Form 8-K,  filed  November 10,
                  2004)

4.14              Form of  Common  Stock  Purchase  Warrant C  (Incorporated  by
                  reference  from  Exhibit 4.1 to Form 8-K,  filed  November 10,
                  2004)

4.15              Form of Placement  Agent  Warrant  (Incorporated  by reference
                  from Exhibit 4.1 to Form 8-K, filed November 10, 2004)

4.16              Form of Funds Escrow Agreement (Incorporated by reference from
                  Exhibit 4.1 to Form 8-K, filed November 10, 2004)

5.1               Opinion of Sichenzia Ross Friedman Ference LLP

9.1               Proxy in favor of Dennis  Vadura and Frank Wiebe from Picasso,
                  LLC  (Incorporated  by reference from Exhibit 10.9 to the Form
                  10-KSB for the fiscal year ended June 30, 2002,  filed October
                  7, 2002)

9.2               Proxy  in  favor  of  Dennis   Vadura  and  Frank  Wiebe  from
                  ViperTrust  (Incorporated  by reference  from Exhibit 10.10 to
                  the Form 10-KSB for the fiscal year ended June 30, 2002, filed
                  October 7, 2002)

9.3               Proxy in favor of Dennis  Vadura and Frank  Wiebe from  Aramis
                  Investment, LLC (Incorporated by reference from Exhibit 9.3 to
                  Form  10-KSB/A for the fiscal year ended June 30, 2003,  filed
                  June 8, 2004)

9.4               Proxy in favor of  Dennis  Vadura  and  Frank  Wiebe  from The
                  Glacier Trust  (Incorporated  by reference from Exhibit 9.4 to
                  Form  10-KSB/A for the fiscal year ended June 30, 2003,  filed
                  June 8, 2004)

9.5               Proxy in favor of Dennis  Vadura and Frank Wiebe from Morpheus
                  Trust  (Incorporated  by  reference  from  Exhibit 9.5 to Form
                  10-KSB/A for the fiscal year ended June 30,  2003,  filed June
                  8, 2004)

10.1              Stock Exchange  Agreement dated May 20, 2002, between WIPC and
                  AccuPoll, Inc., Dennis Vadura and Frank Wiebe (Incorporated by
                  reference from Exhibit 1 to Form 8-K/A filed May 28, 2002)

10.2              Employment  Agreement,  dated  May 20,  2002,  between  Dennis
                  Vadura and AccuPoll  (Incorporated  by reference  from Exhibit
                  10.2 to Form 10-KSB/A for the fiscal year ended June 30, 2003,
                  filed June 8, 2004)

10.3              Employment Agreement,  dated May 20, 2002, between Frank Wiebe
                  and AccuPoll  (Incorporated  by reference from Exhibit 10.2 to
                  Form  10-KSB/A for the fiscal year ended June 30, 2003,  filed
                  June 8, 2004)

10.4              Indemnification Agreement,  between Dennis Vadura and AccuPoll
                  (Incorporated  by reference from Exhibit 10.13 to the Form-KSB
                  for fiscal year ended June 30, 2002, filed October 7, 2002)

10.5              Indemnification  Agreement,  between  Frank Wiebe and AccuPoll
                  (Incorporated  by reference from Exhibit 10.14 to the Form-KSB
                  for fiscal year ended June 30, 2002, filed October 7, 2002)

                                      II-9

<PAGE>

EXHIBIT NUMBER                           DESCRIPTION
--------------------------------------------------------------------------------
10.6              Master  Services  Agreement  dated  April  2002 with Web Tools
                  International,  Inc.  (Incorporated  by reference from Exhibit
                  10.7 to Form-KSB  for fiscal year ended June 30,  2002,  filed
                  October 7, 2002)

10.7              Consulting Agreement dated April 23, 2002 between AccuPoll and
                  GCH Capital,  Ltd (Incorporated by reference from Exhibit 10.8
                  to Form-KSB for fiscal year ended June 30, 2002, filed October
                  7, 2002)

10.8              Consulting Agreement, dated May 29, 20002 between Craig Hewitt
                  and AccuPoll  (Incorporated by reference from Exhibit 10.17 to
                  the  Form-KSB  for  fiscal  year ended  June 30,  2002,  filed
                  October 7, 2002)

10.9              AccuPoll 2002 Consultant  Compensation  Plan  (Incorporated by
                  reference from Exhibit 10 to Form S-8 filed June 11, 2002)

10.10             Exclusive  Territory and Compensation  Agreement,  November 4,
                  2003, by and between AccuPoll and AmCad, LLC  (Incorporated by
                  reference  from Exhibit  10.12 to Form 10-KSB/A for the fiscal
                  year ended June 30, 2003, filed June 8, 2004)

10.11             Standard Sublease dated July 23, 2003 between Greenberg Farrow
                  Architecture,  Inc.  and AccuPoll  (Incorporated  by reference
                  from Exhibit  10.14 to Form 10-KSB/A for the fiscal year ended
                  June 30, 2003, filed June 8, 2004)

10.12             Teaming Agreement dated July 9, 2004, by and between AccuPoll,
                  Inc. and Alternative  Resources  Corporation  (Incorporated by
                  reference  from Exhibit 10.12 to Form 10-K for the fiscal year
                  ended June 30, 2004, filed September 28, 2004)

10.13             Exclusive  Supply  Agreement  dated  December  20, 2001 by and
                  between Source Technologies, Inc. and Web Tools International,
                  Inc.  (Incorporated  by reference  from Exhibit  10.13 to Form
                  10-K for the fiscal year ended June 30, 2004,  filed September
                  28, 2004)

21.1              List of Subsidiaries  (Incorporated  by reference from Exhibit
                  21.1 to Form 10-K for the fiscal  year  ended  June 30,  2004,
                  filed September 28, 2004)

23.1              Consent of Sichenzia  Ross  Friedman  Ference LLP (Included in
                  Exhibit 5.1)

23.2              Consent of Squar, Milner, Reehl & Williamson, LLP

24.1              Powers of Attorney (Included in signature page)

ITEM 17.  UNDERTAKINGS.

(a)  The undersigned Registrant hereby undertakes:

     1.   To file,  during any period in which offers or sales are being made, a
          post-effective amendment to this Registration Statement:

          (i)  to include any  prospectus  required  by Section  10(a)(3) of the
               Securities Act of 1933, as amended;

          (ii) to reflect in the  prospectus  any facts or events  arising after
               the  effective  date of the  Registration  Statement (or the most
               recent post-effective amendment thereof),  which, individually or
               in  the  aggregate,   represent  a  fundamental   change  in  the
               information   set   forth   in   the   Registration    Statement.
               Notwithstanding the foregoing, any increase or decrease in volume
               of  securities  offered (if the total dollar value of  securities
               offered  would not  exceed  that  which was  registered)  and any
               deviation  from  the low or  high  end of the  estimated  maximum
               offering  range may be reflected in the form of prospectus  filed
               with the Commission pursuant to Rule 424(b) if, in the aggregate,
               the  changes  in volume  and price  represent  no more than a 20%
               change in the maximum  aggregate  offering price set forth in the
               "Calculation  of   Registration   Fee"  table  in  the  effective
               registration statement; and

          (iii)to include any material  information  with respect to the plan of
               distribution   not  previously   disclosed  in  the  Registration
               Statement  or any  material  change  to such  information  in the
               Registration Statement,

     2.   That,  for  the  purpose  of  determining   any  liability  under  the
          Securities Act of 1933, as amended, each such post-effective amendment
          shall be deemed to be a new  registration  statement  relating  to the
          securities  offered  therein,  and the offering of such  securities at
          that  time  shall be  deemed  to be the  initial  bona  fide  offering
          thereof.

     3.   To remove from registration by means of a post-effective amendment any
          of  the  securities  being  registered  which  remain  unsold  at  the
          termination of the offering.

     4.   The undersigned  Registrant  hereby  undertakes  that, for purposes of
          determining  any  liability  under  the  Securities  Act

                                     II-10

<PAGE>

          of 1933,  as amended,  each filing of the  Registrant's  Annual Report
          pursuant to Section 13(a) or Section 15(d) of the Securities  Exchange
          Act of 1934,  as amended,  that is  incorporated  by  reference in the
          Registration  Statement  shall  be  deemed  to be a  new  registration
          statement relating to the securities offered therein, and the offering
          of such securities at that time shall be deemed to be the initial bona
          fide offering thereof.

     5.   Insofar  as   indemnification   for  liabilities   arising  under  the
          Securities  Act of 1933,  as amended (the "Act"),  may be permitted to
          directors, officers and controlling persons of the Registrant pursuant
          to the foregoing  provisions,  or otherwise,  the  Registrant has been
          advised that in the opinion of the Securities and Exchange  Commission
          such  indemnification is against public policy as expressed in the Act
          and is,  therefore,  unenforceable.  In the  event  that a  claim  for
          indemnification  against such  liabilities  (other than the payment by
          the Registrant of expenses incurred or paid by a director,  officer or
          controlling  person of the Registrant 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,
          the Registrant  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 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.

     6.   The undersigned registrant hereby undertakes to deliver or cause to be
          delivered with the  prospectus,  to each person to whom the prospectus
          is sent or given, the latest annual report to security holders that is
          incorporated by reference in the prospectus and furnished  pursuant to
          and  meeting  the  requirements  of Rule 14a-3 or Rule 14c-3 under the
          Securities   Exchange  Act  of  1934;  and,  where  interim  financial
          information  required to be presented by Article 3 of Regulations  S-X
          are not set  forth  in the  prospectus,  to  deliver,  or  cause to be
          delivered to each person to whom the prospectus is sent or given,  the
          latest quarterly report that is specifically incorporated by reference
          in the prospectus to provide such interim financial information.

                                     II-11

<PAGE>

                                   SIGNATURES

         Pursuant  to the  requirements  of the  Securities  Act  of  1933,  the
registrant  has duly  caused  this  registration  statement  to be signed on its
behalf by the  undersigned,  thereunto  duly  authorized  in the City of Tustin,
State of California, on January 21, 2005.

                                         ACCUPOLL HOLDING CORP.

                                By:      /s/ Dennis Vadura
                                         -----------------------------------
                                         Dennis Vadura,
                                         Chief Executive Officer and Director

                                By:      /s/ Frank J. Wiebe
                                         -----------------------------------
                                         Frank J. Wiebe,
                                         President, Secretary, Treasurer
                                         and Director

                                By:      /s/ Craig A. Hewitt
                                         -----------------------------------
                                         Craig A. Hewitt,
                                         Chief Financial Officer and Principal
                                         Accounting Officer

                                POWER OF ATTORNEY

         Each person whose  signature  appears  below  constitutes  and appoints
Dennis Vadura,  Frank J. Wiebe and Craig A. Hewitt,  or either of them, his true
and  lawful  attorney-in-fact  and  agent,  acting  alone,  with full  powers of
substitution  and  resubstitution,  for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments)  to this  Registration  Statement,  any  Amendments  thereto and any
Registration  Statement  of the same  offering  which is  effective  upon filing
pursuant to Rule 462(b) under the Securities Act, and to file the same, with all
exhibits  thereto,  and  other  documents  in  connection  therewith,  with  the
Commission,  granting unto said  attorney-in-fact  and agent, each acting alone,
full  powers  and  authority  to do and  perform  each and  every  act and thing
requisite and  necessary to be done in and about the  premises,  as fully to all
intents and  purposes as he might or could do in person,  hereby  ratifying  and
confirming all said  attorney-in-fact and agent, acting alone, or his substitute
or substitutes, may lawfully do or cause to be done by virtue hereof.

         Pursuant  to the  requirements  of the  Securities  Act of  1933,  this
registration  statement  has  been  signed  by  the  following  persons  in  the
capacities and on the dates indicated:

<TABLE>
<CAPTION>

         SIGNATURE                    TITLE                                       DATE
<S>                                   <C>                                         <C>

     /s/ Dennis Vadura                Chief Executive Officer and Director        January 21, 2005
----------------------------------
         Dennis Vadura

     /s/ Frank J. Wiebe               President, Secretary, Treasurer             January 21, 2005
----------------------------------    and Director
         Frank J. Wiebe

     /s/ Andrea M. Porcelli           Director                                    January 21, 2005
----------------------------------
         Andrea M. Porcelli

     /s/ Phil Trubey                  Director                                    January 21, 2005
----------------------------------
         Phil Trubey
</TABLE>

                                     II-12
[{"type": "S-1", "sequence": "1", "filename": "accus1.txt", "description": "ACCUPOLL", "secsgml_size_bytes": 473375}]
{"company-data": {"conformed-name": "ACCUPOLL HOLDING CORP", "cik": "0000764794", "assigned-sic": "6770", "irs-number": "112751630", "state-of-incorporation": "NV", "fiscal-year-end": "0630"}, "filing-values": {"form-type": "S-1", "act": "33", "file-number": "333-122425", "film-number": "05562804"}, "business-address": {"street1": "15101 RED HILL  AVE.", "street2": "#220", "city": "TUSTIN", "state": "CA", "zip": "92780", "phone": "(949)200-4000"}, "mail-address": {"street1": "15101 RED HILL  AVE.", "street2": "#220", "city": "TUSTIN", "state": "CA", "zip": "92780"}, "former-company": [{"former-conformed-name": "WESTERN INTERNATIONAL PIZZA CORP", "date-changed": "20000711"}, {"former-conformed-name": "KIWI VENTURES LTD", "date-changed": "19851122"}]}
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 31, 2005.
                          REGISTRATION NO. 333-_______

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

                                    FORM S-1
             REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

                             ACCUPOLL HOLDING CORP.
             (Exact name of registrant as specified in its charter)

                                     NEVADA
                                     ------
         (State or other jurisdiction of incorporation or organization)

                                      6770
                                      ----
            (Primary Standard Industrial Classification Code Number)

                                   11-2751630
                                   ----------
                     (I.R.S. Employer Identification Number)

                         15101 Red Hill Ave., Suite 220
                                Tustin, CA 92780
                                 (949) 200-4000
               (Address, including zip code, and telephone number,
        including area code, of registrant's principal executive offices)

                                  Dennis Vadura
                         15101 Red Hill Ave., Suite 220
                                Tustin, CA 92780
                                 (949) 200-4000
                                 --------------
            (Name, address, including zip code, and telephone number,
                   including area code, of agent for service)

                                 WITH COPIES TO:

                             Gregory Sichenzia, Esq.
                              David Schubauer, Esq.
                       Sichenzia Ross Friedman Ference LLP
                           1065 Avenue of the Americas
                            New York, New York 10018
                                 (212) 930-9700

 AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT
 ------------------------------------------------------------------------------
       (Approximate date of commencement of proposed sale to the public)

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|

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. |_|

                       (COVER CONTINUES ON FOLLOWING PAGE)
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,
please check the following box. |_|
CALCULATION OF REGISTRATION FEE
============================================    =================    ====================    =====================    ==============
                                                                       PROPOSED MAXIMUM         PROPOSED MAXIMUM         AMOUNT OF
     TITLE OF EACH CLASS OF SECURITIES            AMOUNT TO BE        OFFERING PRICE PER       AGGREGATE OFFERING      REGISTRATION
              TO BE REGISTERED                     REGISTERED             SECURITY(1)                PRICE                  FEE
--------------------------------------------    -----------------    --------------------    ---------------------    --------------
Common Stock, $.001 par value (2)                  79,832,045                $0.094              $7,504,212.23            $883.25
Common Stock, $.001 par value                      25,986,499                $0.094              $2,442,730.91            $287.51
--------------------------------------------    -----------------    --------------------    ---------------------    --------------
Total                                             105,818,544                $0.094              $9,946,943.14          $1,170.76
============================================    =================    ====================    =====================    ==============
(1)  Estimated  solely for  purposes  of  calculating  the  registration  fee in
     accordance  with Rule 457(c) and Rule 457(g)  under the  Securities  Act of
     1933,  using  the  average  of the high and low  price as  reported  on the
     Over-The-Counter  Bulletin Board on January 25, 2005,  which was $0.094 per
     share.

(2)  Includes a good faith  estimate of shares of common stock issuable upon the
     exercise of common stock purchase  warrants to account for antidilution and
     price protection adjustments,  as contemplated by certain provisions of the
     Subscription Agreements.

     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 THIS  REGISTRATION  STATEMENT  SHALL BECOME
EFFECTIVE  ON SUCH  DATE  AS THE  SECURITIES  AND  EXCHANGE  COMMISSION,  ACTING
PURSUANT TO SAID SECTION 8(A) MAY DETERMINE.

================================================================================
THE  INFORMATION  IN THIS  PROSPECTUS  IS NOT COMPLETE  AND MAY BE CHANGED.  THE
SELLING  STOCKHOLDERS  MAY NOT SELL  THESE  SECURITIES  UNTIL  THE  REGISTRATION
STATEMENT FILED WITH THE SECURITIES AND EXCHANGE  COMMISSION IS EFFECTIVE.  THIS
PROSPECTUS  IS NOT AN OFFER TO SELL THESE  SECURITIES  AND IS NOT  SOLICITING AN
OFFER TO BUY  THESE  SECURITIES  IN ANY  STATE  WHERE  THE  OFFER OR SALE IS NOT
PERMITTED.

      PRELIMINARY PROSPECTUS SUBJECT TO COMPLETION, DATED JANUARY 31, 2005

                             ACCUPOLL HOLDING CORP.
                           UP TO 105,818,544 SHARES OF
                                  COMMON STOCK

         This prospectus relates to the resale by the selling stockholders of up
to 105,818,544  shares of our common stock.  The selling  stockholders  may sell
common  stock  from time to time in the  principal  market on which the stock is
quoted at the prevailing market price or in negotiated transactions. The selling
stockholders  may be deemed  underwriters  of the shares of common stock,  which
they are offering.

         We are not  selling  any shares of common  stock in this  offering  and
therefore  will not receive any proceeds from this offering.  We will,  however,
receive  the sale  price  of any  common  stock we sell for cash to the  selling
stockholders  upon  exercise  of  warrants.   All  costs  associated  with  this
registration will be borne by us.

         Our common stock is currently quoted on the  Over-The-Counter  Bulletin
Board under the symbol ACUP.  As of January 19, 2005,  the closing  price of our
common stock was $0.093.

            INVESTING IN OUR COMMON STOCK INVOLVES SUBSTANTIAL RISKS.
                    SEE "RISK FACTORS," BEGINNING ON PAGE 2.

         NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS  IS TRUTHFUL OR  COMPLETE.  ANY  REPRESENTATION  TO THE CONTRARY IS A
CRIMINAL OFFENSE.

         The  information in this Prospectus is not complete and may be changed.
This  Prospectus  is included in the  Registration  Statement  that was filed by
AccuPoll Holding Corp. with the Securities and Exchange Commission.  The selling
stockholders  may not sell these  securities  until the  registration  statement
becomes effective.  This Prospectus is not an offer to sell these securities and
is not soliciting an offer to buy these  securities in any state where the offer
or sale is not permitted.

                  THE DATE OF THIS PROSPECTUS IS ________, 2005
TABLE OF CONTENTS

                                                                            Page

Prospectus Summary                                                             1
Risk Factors                                                                   2
Forward-Looking Statements                                                     9
Use of Proceeds                                                                9
Selling Stockholders                                                          10
Plan of Distribution                                                          12
Description of Securities                                                     13
Market for Common Equity and Related Stockholder Matters                      17
Selected Financial Data                                                       18
Description of Business                                                       19
Description of Property                                                       26
Legal Proceedings                                                             26
Supplementary Financial Information                                           27
Management's Discussion and Analysis of Financial Condition and
        Results of Operations                          29
Quantitative and Qualitative Disclosure About Market Risk                     36
Management                                                                    37
Executive Compensation                                                        39
Security Ownership of Certain Beneficial Owners and Management                41
Certain Relationships and Related Transactions                                43
Commission Position on Indemnification for Securities Act Liabilities         44
Legal Matters                                                                 44
Experts                                                                       45
Where you can find more Information                                           45
Index to Consolidated Financial Statements                                   F-1
PROSPECTUS SUMMARY

         The following summary highlights selected information contained in this
prospectus.  This  summary  does not  contain  all the  information  you  should
consider  before  investing  in the  securities.  Before  making  an  investment
decision,  you should read the entire prospectus carefully,  including the "Risk
Factors"  section,  the  financial  statements  and the  notes to the  financial
statements.  As used throughout this  prospectus,  the terms  "AccuPoll,"  "we,"
"us," and "our" refer to AccuPoll Holding Corp.

                             ACCUPOLL HOLDING CORP.

         We have  developed a direct  recording  electronic  voting machine that
provides a  voter-verified  paper  audit  trail  that is both human and  machine
readable. We intend to market our voting machine and its associated products and
services for use in federal, state, local and private elections.

         We have incurred losses since our inception. For the three months ended
September  30,  2004,  we had  revenues of $494,244  and  incurred a net loss of
$3,687,072.  For the fiscal  years ended June 30,  2004,  2003 and 2002,  we had
revenues of $1,508,656,  $0 and $0, respectively,  and we incurred net losses of
$15,379,253, $4,848,567 and $2,406,580,  respectively. At September 30, 2004, we
had a working  capital  deficiency of $6,222,844 and an  accumulated  deficit of
$26,321,472.  As a result,  our  auditors,  in their report dated  September 27,
2004,  have expressed  substantial  doubt about our ability to continue as going
concern.

         Our principal executive offices are located at 15101 Red Hill Ave., Ste
220, Tustin, CA 92780. Our telephone number is (949) 200-4000.

                                  THE OFFERING

Common stock outstanding
before the offering ..................213,871,410 shares as of December 31, 2004

Common stock offered by
selling stockholders ...................Up  to  105,818,544  shares,   based  on
                                        current  market prices and assuming full
                                        exercise  of  outstanding  common  stock
                                        purchase   warrants   by   the   selling
                                        stockholders.   This  number  represents
                                        approximately   46.7%  of  our   current
                                        outstanding  stock  and  includes  up to
                                        79,832,045   shares  of   common   stock
                                        issuable   pursuant   to  common   stock
                                        purchase warrants, which includes a good
                                        faith estimate of shares of common stock
                                        to account  for  antidilution  and price
                                        protection adjustments.

Common stock to be outstanding
after the offering .....................Up to 293,705,455 shares

Use of proceeds ........................We will not  receive any  proceeds  from
                                        the sale of the common stock  hereunder.
                                        We will, however, receive the sale price
                                        of any common  stock we sell for cash to
                                        the selling  stockholders  upon exercise
                                        of warrants. See "Use of Proceeds" for a
                                        complete description.

OTCBB Symbol ...........................ACUP.OB

                                       1
RISK FACTORS

         This investment has a high degree of risk. Before you invest you should
carefully  consider the risks and  uncertainties  described  below and the other
information in this  prospectus.  Each of the following risks may materially and
adversely  affect our business,  results of operations and financial  condition.
These risks may cause the market price of our common stock to decline, which may
cause you to lose all or a part of the money you paid to buy our common stock.

         We provide the following cautionary discussion of risks,  uncertainties
and possible inaccurate  assumptions  relevant to our business and our products.
These are  factors  that we think  could  cause  our  actual  results  to differ
materially from expected results.

RISKS RELATING TO OUR BUSINESS

WE HAVE INCURRED SIGNIFICANT LOSSES TO DATE AND MAY NEVER BE PROFITABLE.

         We began our  current  operations  on August 9, 2001 and have  incurred
significant  operating  losses during each fiscal period since that date. We had
no revenues during the period from  commencement of our voting system operations
through  September 30, 2004.  Revenues from our wholly owned subsidiary Z Prompt
were  $494,244  for the three months ended  September  30, 2004.  For the fiscal
years ended June 30, 2004, 2003 and 2002, we incurred net losses of $15,379,253,
$4,848,567 and $2,406,580, respectively. At September 30, 2004, we had a working
capital deficiency of $6,222,844 and an accumulated deficit of $26,321,472. As a
result,  our auditors,  in their report dated September 27, 2004, have expressed
substantial doubt about our ability to continue as going concern. We expect that
we will  incur  significant  operating  losses  and  negative  cash  flows  from
operations for the foreseeable  future. If our losses continue and we are unable
to commercialize, manufacture and market our products successfully, we may never
generate  sufficient  revenues to achieve  profitability  or positive cash flows
from operations.

OUR SUBSIDIARY,  Z PROMPT, INC. HAS FILED A PETITION FOR RELIEF UNDER CHAPTER 11
OF THE UNITED STATES BANKRUPTCY CODE AND WE MAY LOSE OUR ENTIRE INTEREST IN IT.

         On March 23, 2004, our wholly owned subsidiary, Z prompt, Inc., filed a
petition for relief under  Chapter 11 of the United  States  Bankruptcy  Code. Z
prompt continues to conduct business  activities as a  debtor-in-possession.  We
cannot predict the outcome of this proceeding and it involves numerous risks and
uncertainties, such as:

     o    The appointment of a trustee;

     o    The ability of creditors to obtain relief from the automatic stay;

     o    The continued willingness of customers to do business with Z prompt;

     o    The ability of Z prompt to obtain financing on acceptable terms;

     o    The  outcome  of any  adversary  proceedings  that have been or may be
          commenced by or against Z prompt;

     o    The possible  conversion of the case to liquidation under Chapter 7 of
          the Bankruptcy Code or dismissal of the case;

     o    The  ability to obtain  confirmation  of a plan of  reorganization  on
          terms  acceptable to us; and

     o    The ability of Z prompt to successfully  execute any confirmed plan of
          reorganization.

         In  addition,  Z prompt will incur legal and other fees and expenses in
connection with the bankruptcy  proceedings and we may not be able to fund these
costs. Z prompt has been our only source of consolidated revenues since November
1,  2003,  the date on which  the  acquisition  was  recognized  for  accounting
purposes.  If Z prompt is unable to reorganize  successfully,  we could lose our
entire interest in it.

                                       2
IF WE ARE UNABLE TO OBTAIN  ADDITIONAL  FINANCING,  WE WILL HAVE TO  DISCONTINUE
OPERATIONS.

         We require approximately $2,500,000 in additional financing in order to
be able to continue  operations  over the next twelve  months.  With our current
capital, we expect that we can continue operations for approximately two months.
In the past, our capital  requirements have been met through sales of our common
stock and convertible  notes. We cannot assure you that we will be able to raise
new capital or that  sources of capital will be available to us on terms that we
find acceptable.  If we are unable to obtain additional  financing on acceptable
terms,  we  will  be  unable  to  continue  operations.  Moreover,  if we  raise
additional  capital through  borrowing or other debt  financing,  we would incur
substantial   interest  expense.   Sales  of  additional  equity  securities  or
securities  convertible  into equity  securities  will result in dilution to our
present stockholders.

IF WE ARE  UNABLE TO EXPAND  OUR  SALES,  MARKETING,  DISTRIBUTION  AND  SERVICE
CAPABILITIES  OR ENTER INTO  AGREEMENTS  WITH THIRD PARTIES TO DO SO, WE WILL BE
UNABLE TO SUCCESSFULLY MARKET AND SELL OUR PRODUCTS.

         We  currently   have  limited   sales,   marketing   and   distribution
capabilities and limited service capabilities.  If we are unable to expand these
capabilities  either by developing  our own sales,  marketing,  distribution  or
service organization or by entering into agreements with others at a competitive
cost, we will be unable to market and successfully sell our products. We plan to
enter into  strategic  relationships  with other  companies to provide  services
relating to our products,  including  product rollout  support,  election worker
education,  help desk, and break/fix support.  We cannot assure you that we will
be able to develop and maintain successful  relationships on terms acceptable to
us. The failure to do so could materially and adversely affect the marketing and
sale of our products.

WE RELY ON A THIRD  PARTY  MANUFACTURER.  TO THE EXTENT  THAT THIS  MANUFACTURER
EXPERIENCES  FINANCIAL  OR  OPERATIONAL  DIFFICULTIES,  OUR  BUSINESS  COULD  BE
INTERRUPTED.

         We currently  rely, and expect to continue to rely, on a third party to
manufacture  our  product.  Our  agreement  requires  us to acquire  the product
exclusively from this manufacturer unless the manufacturer is unable to meet our
requirements on time. To the extent that this manufacturer experiences financial
or  operational   difficulties,   our  business  could  be  interrupted.   These
difficulties  could  inhibit  our  ability to  provide  products  in  sufficient
quantities with  acceptable  quality and at an acceptable cost to our customers.
Any disruption in supply of our product from this manufacturer would cause us to
delay delivery to our customers that could lead to a loss of sales and revenues.

MANY OF OUR  COMPETITORS  ARE  LARGER  AND  HAVE  GREATER  FINANCIAL  AND  OTHER
RESOURCES  THAN WE DO AND THOSE  ADVANTAGES  COULD MAKE IT  DIFFICULT  FOR US TO
COMPETE WITH THEM.

         We  expect   significant   competition   from  existing  and  potential
competitors. We may not have the financial resources, technical expertise, sales
and marketing abilities or support capabilities to compete successfully. Many of
our  existing   competitors   have  greater   market   penetration,   brand-name
recognition,  market  presence,  engineering  and  marketing  capabilities,  and
financial, technological and personnel resources than we do. As a result, we may
not be able to compete effectively, which could prevent us from implementing our
business strategy.

IF WE CANNOT MEET THE LEGAL  REQUIREMENTS  AND OTHER  PROCEDURES WITH RESPECT TO
GOVERNMENT  PROCUREMENT  WE WILL NOT BE ABLE TO SELL OUR  VOTING  SYSTEM AND OUR
BUSINESS WILL BE MATERIALLY ADVERSELY AFFECTED.

         Because we plan to sell our  products to  government  agencies,  we are
subject to laws,  regulations and other  procedures that govern  procurement and
contract  implementation by those agencies.  These agencies are likely to impose
vendor  qualification  requirements,   such  as  requirements  with  respect  to
financial  condition,   insurance  and  operational  history.  We  have  limited
experience  with  government  procurement  and cannot assure you that we will be
able to meet existing or future procurement laws,  regulations and procedures or
that we will be able to qualify as a vendor.  Some  procurement  processes could
involve an extensive period of product evaluation,  including  evaluation by the
public.  Compliance with government  procurement and qualification  requirements
could significantly delay sales of our products.  Delays could also occur due to
protests of bid  specifications  or challenges to contract awards. If we fail to
comply with an agency's  procurement  or vendor  qualification  requirements  or
procedures,  we will be unable to market and sell our  products to that  agency.
Government  agencies may also impose

                                       3
contractual   terms  and   conditions,   such  as  warranty,   termination   and
indemnification provisions, that are unfavorable to us.

IF WE ARE UNABLE TO RETAIN THE SERVICES OF MESSRS. DENNIS VADURA AND FRANK WIEBE
OR IF WE ARE UNABLE TO SUCCESSFULLY RECRUIT QUALIFIED  PERSONNEL,  WE MAY NOT BE
ABLE TO CONTINUE OPERATIONS.

         Our  future  performance  depends   significantly  upon  the  continued
contributions of both Mr. Dennis Vadura,  our chief executive  officer,  and Mr.
Frank J. Wiebe,  our  president.  The loss of the services of Mr.  Vadura or Mr.
Wiebe could materially and adversely affect our business.  We may not be able to
retain  these  employees  and  searching  for their  replacements  could  divert
attention from senior management and delay our ability to implement our business
strategy. While we maintain employment agreements with Messrs. Vadura and Wiebe,
they may terminate their  relationship  with us at any time. We are not aware of
any  plans by  Messrs.  Vadura or Wiebe to leave  us.  If we are  successful  in
implementing  and  developing  our  business,  we  expect  that we will  need to
increase our  workforce.  Accordingly,  our future success will likely depend on
our  ability to  attract,  hire,  train and retain  highly  skilled  management,
technical,  sales,  marketing and customer  support  personnel.  Competition for
qualified  employees  is  intense  and  our  financial  resources  are  limited.
Consequently,  we may not be  successful  in  attracting,  hiring,  training and
retaining the personnel we need, which would impede our ability to implement our
business strategy.

IF WE DO NOT  SUCCESSFULLY  IMPROVE AND DEVELOP NEW PRODUCTS AND  SERVICES,  OUR
BUSINESS WILL BE HARMED.

         We  expect  that the pace of  technological  advances  in the  computer
voting  machine  industry  will  rapidly   increase.   Our  ability  to  compete
successfully  is heavily  dependent  upon our ability to ensure a continuous and
timely flow of competitive  products and technology into the marketplace.  If we
do not successfully develop new and improved technologies,  our business will be
harmed.

WE MAY  ACQUIRE  OTHER  BUSINESSES  AND OUR  BUSINESS  COULD BE  MATERIALLY  AND
ADVERSELY AFFECTED AS A RESULT OF ANY OF THESE ACQUISITIONS.

         We  are  looking  for  strategic  opportunities  to  grow  our  product
offerings through acquisitions or strategic investments.  In this regard, during
the year ended June 30,  2004,  we entered  into an agreement to purchase all of
the  outstanding  shares of Z prompt,  Inc. that was  recognized  for accounting
purposes  during our fiscal quarter ended  December 31, 2003. In the future,  we
may acquire or make strategic investments in other complementary  businesses. We
have limited experience in acquiring or investing in other businesses and we may
not be successful in completing,  financing, or integrating an acquired business
into our existing operations.

         Any such  acquisitions  could  involve the dilutive  issuance of equity
securities  and the  incurrence  of  debt.  In  addition,  although  we have not
experienced any of these problems to date, the acquisition of Z prompt, Inc. and
future acquisitions pose numerous additional risks, such as:

     o    unanticipated costs associated with the acquisition or investment;

     o    diversion of management time and resources;

     o    problems in assimilating and integrating the new business operations;

     o    potential loss of key customers or personnel of an acquired company;

     o    increased legal and compliance costs; and

     o    unanticipated liabilities of an acquired company.

         Further,  although an acquired  company may have already  developed and
marketed  products,  we can not assure you that the products will continue to be
successful,  that product  enhancements will be made in a timely fashion or that
pre-acquisition  due diligence  will have  identified  all possible  issues that
might arise with respect to the acquired  company or its products and that could
materially and adversely affect our business.

                                       4
RISKS RELATING TO OUR TECHNOLOGY

IF OUR PRODUCTS FAIL TO PERFORM  PROPERLY,  OUR REPUTATION COULD BE DAMAGED,  WE
COULD  LOSE  POTIENTIAL  SALES  AND  CUSTOMERS  AND WE COULD  INCUR  SIGNIFICANT
LIABILITIES.

         Our  products  incorporate  a number  of  intricate  computer  software
programs  and hardware  components  that must work  seamlessly  in order for our
voting machine to function correctly.  While we expect our product to perform to
federal  voting  system  standards,  we cannot  assure you that it will function
properly at all times. If our system's software programs or hardware  components
experience   failure  or   malfunction   or  are   alleged  to  have  failed  or
malfunctioned,  we  are  likely  to  receive  significant  adverse  publicity  -
particularly  if the  failure is alleged to have had an effect on the outcome of
an  election.  As a result,  our  reputation  could be  damaged,  we could  lose
potential sales and customers and we could incur significant liabilities.

IF WE DO NOT ADEQUATELY  PROTECT OUR INTELLECTUAL  PROPERTY RIGHTS, OUR BUSINESS
WILL BE HARMED.

         We have applied to the United States Patent and Trademark  Office for a
systems and method patent with respect to our  electronic  voting system and for
trademark  registration  with respect to the AccuPoll  name and logo.  We cannot
assure you that a patent will be issued or our trademarks will be registered. If
issued,  we cannot  assure  you that we will be able to defend  or  enforce  the
patent,  trademark or other intellectual property rights that we may have in our
products,   name  or  logo.   Although  we  may  initiate   litigation  to  stop
infringement,  intellectual  property  litigation  is often  expensive and could
consume our limited  financial  resources.  Additionally,  third  parties may be
better  able to sustain the costs of  litigation.  If we are unable to defend or
enforce our rights,  other parties may be able to use our  technologies  without
paying  any  compensation  to us.  Furthermore,  we cannot  assure  you that our
competitors  will not  design  around any issued  patents,  or improve  upon our
technology,  or that we will be able to detect  infringements.  Also,  we cannot
assure you that others will not assert  rights in, or ownership  of,  trademarks
and other  proprietary  rights  of ours or that we will be able to  successfully
resolve  these  types of  conflicts.  If we are unable to  establish,  defend or
enforce rights to our technology, our business may be materially harmed.

RISKS RELATING TO REGULATION

EACH OF OUR VOTING SYSTEM  PRODUCTS MUST MEET  QUALIFICATION  AND  CERTIFICATION
STANDARDS  BEFORE THEY CAN BE SOLD. IF WE ARE NOT ABLE TO OBTAIN  CERTIFICATION,
WE MAY NOT BE ABLE TO GENERATE SUFFICIENT REVENUES TO ACHIEVE PROFITABILITY.

         In the United  States,  our ability to sell our voting system  products
depends on the  qualification  of each product through  independent  testing for
compliance with the federal voting system  standards.  In addition,  most states
require  state-level  certification  before  we may sell our  products  to local
jurisdictions  in  those  states.  Moreover,  local  jurisdictions  may  require
acceptance  level  testing.  In March 2004,  our voting  system was qualified as
complying with the 1990 federal voting system standards as to hardware, and 2002
federal  voting  system  standards  as to  software,  and has been  subsequently
certified by the states of Alabama, Arkansas, Kentucky, Mississippi, Ohio, South
Dakota, Utah and West Virginia.  We are seeking full qualification of our voting
system under the 2002 federal voting system standards but cannot assure you that
we will obtain that  qualification.  We cannot assure you that our products will
be certified by additional  states. If we are unable to obtain  certification in
additional states, we may not be able to generate sufficient revenues to achieve
profitability.

IF STATE ELECTION  OFFICIALS  DECERTIFY OUR PRODUCTS WE WILL NOT BE ABLE TO SELL
OUR PRODUCTS IN THOSE STATES AND OUR  REPUTATION  AND BUSINESS MAY BE MATERIALLY
HARMED.

         If certified in a state, our products will be subject to ongoing review
and the state may withdraw certification.  For example, the California Secretary
of State  has  issued  an order  withdrawing  certification  of  certain  of our
competitors'  products.  We cannot  assure  you that a state  will not  withdraw
certification  of our  products  on the basis  that the  product  is  defective,
obsolete or otherwise  unacceptable for use. If  certification is withdrawn,  we
will not be able to  continue to sell the product in the state and are likely to
receive  significant  adverse  publicity.  As a result,  our reputation could be
materially  damaged,  causing us to lose potential sales and customers in other
jurisdictions.

                                       5
CHANGING FEDERAL VOTING SYSTEM  STANDARDS,  STATE  CERTIFICATION AND OTHER LEGAL
REQUIREMENTS  PERTAINING TO OUR PRODUCTS WILL MAKE IT DIFFICULT FOR US TO OBTAIN
CERTIFICATION OF OUR VOTING SYSTEM.

         The market for computerized  voting machines and related  equipment for
use in federal,  state, local and other elections,  is changing as new technical
standards are considered. We expect that federal voting system standards,  state
certification  and other legal  requirements  will change. We may not be able to
anticipate  new standards or changes to existing  standards and we cannot assure
you that our products will comply, or can be modified to comply with, any new or
changed  standards or requirements  that may be adopted.  If our products do not
comply  and  cannot be  modified  to comply  with new or  changed  standards  or
requirements, we may not be able to obtain certification of our voting system.

WE MAY NOT BE ABLE TO OBTAIN  FEDERAL AND STATE  CERTIFICATION  OF PRODUCTS IN A
TIMELY MANNER, WHICH COULD DELAY THE MARKETING AND SALES OF OUR PRODUCTS.

         Independent  testing  authorities test and certify our products.  There
are a  limited  number  of  testing  authorities  able to test and  certify  our
products in accordance  with federal voting system  standards.  These  companies
also  conduct  testing  and  certification  for our  competitors.  Any delays or
disruptions in the services provided by our independent  testing  authorities is
likely  to  affect  our  ability  to  market  and sell our  products  and  could
materially   and  adversely   impact  our  sales  and  our  ability  to  achieve
profitability.

RISKS RELATING TO OUR CURRENT FINANCING ARRANGEMENTS

THERE ARE A LARGE NUMBER OF SHARES UNDERLYING WARRANTS THAT MAY BE AVAILABLE FOR
FUTURE SALE AND THE SALE OF THESE  SHARES MAY  DEPRESS  THE MARKET  PRICE OF OUR
COMMON STOCK.

         As of December 31,  2004,  we had  213,873,410  shares of common  stock
issued  and  outstanding.  There are  79,832,045  shares of common  stock  being
offered pursuant to this prospectus that are issuable upon exercise of currently
outstanding warrants.  All of these shares may be sold without restriction.  The
sale of these shares may adversely affect the market price of our common stock.

THE  ISSUANCE  OF SHARES  UPON  EXERCISE OF  WARRANTS  MAY CAUSE  IMMEDIATE  AND
SUBSTANTIAL DILUTION TO OUR EXISTING STOCKHOLDERS.

         The  issuance  of  shares  upon  exercise  of  warrants  may  result in
substantial  dilution to the interests of other  stockholders  since the selling
stockholders  may  ultimately  convert  or  exercise  and sell  the full  amount
issuable on conversion or exercise.

IF WE ENGAGE IN A LOWER PRICED  TRANSACTION THAN OUR SEPTEMBER AND NOVEMBER 2004
FINANCING  ARRANGEMENTS  WHILE THE RELATED  WARRANTS ARE  OUTSTANDING,  THEN THE
EXERCISE PRICE OF THE WARRANTS WILL BE ADJUSTED TO THE LOWER  TRANSACTION  PRICE
AND WE MAY BE  REQUIRED  TO  ISSUE  ADDITIONAL  SHARES  OF  COMMON  STOCK TO THE
INVESTORS. IF THIS OCCURS, THE NUMBER OF SHARES WHICH ARE REGISTERED PURSUANT TO
THIS PROSPECTUS MAY NOT BE ADEQUATE.  ACCORDINGLY,  WE MAY BE REQUIRED TO FILE A
SUBSEQUENT  REGISTRATION  STATEMENT COVERING ADDITIONAL SHARES. IF THE SHARES WE
HAVE ALLOCATED AND ARE REGISTERING HEREWITH ARE NOT ADEQUATE AND WE ARE REQUIRED
TO FILE AN ADDITIONAL  REGISTRATION STATEMENT, WE MAY INCUR SUBSTANTIAL COSTS IN
CONNECTION THEREWITH.

         We have allocated and registered  79,832,045  shares of common stock to
cover  the  exercise  of  warrants  in  this  offering.  Our  current  financing
arrangement includes  restrictions on engaging in a subsequent financing that is
priced  lower  than the  current  arrangement.  If we engage  in a lower  priced
transaction  while the warrants are outstanding,  then the exercise price of our
warrants will be adjusted to the lower  transaction  price.  In addition,  if we
engage in a lower priced  transaction  without the consent of the investors,  we
will have to issue, for each such occasion, additional shares of common stock to
each  investor  so that the average  per share  purchase  price of the shares of
common  stock  issued to the  investors  is equal to such other  lower price per
share. If this occurs, the number of registered shares issuable upon exercise of
the  warrants  may not be  adequate.  Accordingly,  we may be required to file a
subsequent  registration  statement covering additional shares. If the shares we
have  allocated  to the  registration  statement  are  not  adequate  and we are
required to file an additional  registration statement, we may incur

                                       6
substantial  costs  in  connection  with  the  preparation  and  filing  of such
registration statement.

RISKS RELATING TO OUR SECURITIES

SOME HOLDERS OF OUR SECURITIES MAY HAVE THE RIGHT TO RESCIND THEIR PURCHASES. IF
THESE  SECURITY  HOLDERS  EXERCISE THEIR RIGHT TO RESCIND THEIR  PURCHASES,  OUR
OPERATIONS WILL BE MATERIALLY ADVERSELY AFFECTED.

         We have  offered  and sold a  substantial  number  of  shares of common
stock,   and  warrants  and  options  to  purchase  our  common  stock   without
registration  under the  Securities  Act of 1933, as amended,  or  qualification
under  state  securities  laws.  If any offer or sale were not exempt  from,  or
otherwise  not subject  to,  federal and state  registration  and  qualification
requirements, the purchaser would have a number of remedies, including the right
to rescind the purchase.  The Securities Act of 1933, as amended,  requires that
any claim for rescission be brought within one year of the alleged violation. We
have  sold  approximately  9,768,000  shares of common  stock and  warrants  and
options to purchase  shares of common stock in the United States within one year
of September 30, 2004. The time periods within which claims for rescission  must
be brought  under state  securities  laws vary and may be two years or more from
the date of the alleged violation. We have sold approximately  14,000,000 shares
of common stock and  warrants and options to purchase  shares of common stock in
the United  States within two years of September  30, 2004.  Further,  we cannot
assure you that courts will not apply equitable or other doctrines to extend the
period within which  purchasers  may bring their claims.  The number of warrants
and options  described above does not include warrants and options to purchase a
total of 3,600,000  shares of common stock issued  within two years of September
30, 2004 to our chief executive officer, Dennis Vadura, and our president, Frank
Wiebe, or a warrant to purchase  12,400,000 shares of common stock for which the
holder  has agreed in  writing  that it will not assert any right to  rescission
that it may  have.  However,  we  cannot  assure  you  that  this  agreement  is
enforceable.  If any  security  holders  exercise  their right to rescind  their
purchases, our operations will be materially adversely affected.

         Should  federal or state  securities  regulators  deem it  necessary to
bring  administrative  or legal  actions  against  us based  upon a  failure  to
register  or  qualify,  the  defense of any  enforcement  action is likely to be
costly,  distracting to our management and if  unsuccessful  could result in the
imposition of  significant  penalties.  The filing of a claim for  rescission or
enforcement  action against us or our officers or directors could materially and
adversely impact our stock price,  generate  significant  adverse publicity that
materially  affects our sales and materially impair our ability to raise capital
through future sales of our securities.  We may also incur significant  expenses
should we  determine  that it is  advisable  to register  shares  issuable  upon
exercise of  outstanding  warrants or options or upon  conversion of outstanding
notes.

WE HAVE NOT FILED OR SENT INFORMATION  STATEMENTS IN CONNECTION WITH STOCKHOLDER
ACTIONS BY WRITTEN CONSENT.  ANY  ADMINISTRATIVE  OR LEGAL ACTION AGAINST US FOR
NOT FILING OR SENDING SUCH  INFORMATION  STATEMENTS MAY HAVE A MATERIAL  ADVERSE
EFFECT ON OUR BUSINESS.

         In 2002,  we  effected a one for five  reverse  split of our issued and
outstanding  shares of common  stock and filed  amendments  to Article IV of our
articles of  incorporation  to provide for a class of preferred  stock.  Each of
these  actions  required  the approval of our  stockholders  that we believe was
given by written consent. In connection with these written consents,  we did not
file with the Securities and Exchange Commission written information  statements
containing the information  specified in its proxy rules.  Also, we did not send
information  statements  in advance of the action as required by the proxy rules
of the Securities and Exchange  Commission.  Accordingly,  it is possible that a
stockholder could challenge the validity of these actions and the Securities and
Exchange Commission could take enforcement action against us. The defense of any
challenge  or  enforcement  action is likely to be  costly,  distracting  to our
management  and  could  in the  case  of an  enforcement  action  result  in the
imposition of significant penalties. The filing of a stockholder challenge or an
enforcement  action  could  materially  and  adversely  impact our stock  price,
generate  significant  adverse publicity that materially  affects our sales, and
materially  impair our  ability to raise  capital  through  future  sales of our
securities.

                                       7
THERE  ARE A LARGE  NUMBER  OF  SHARES  UNDERLYING  OUR  OUTSTANDING  DERIVATIVE
SECURITIES THAT MAY BE AVAILABLE FOR FUTURE SALE. THE EXERCISE OF THESE WARRANTS
AND OPTIONS WILL CAUSE SUBSTANTIAL DILUTION TO OUR EXISTING STOCKHOLDERS

         As of September  30, 2004, we had  outstanding  warrants and options to
purchase 84,537,152 shares of common stock and notes convertible into 55,405,571
shares of common stock.  The exercise  price of the warrants and options  ranges
from $.01 to $1.54 per share and the notes are currently  convertible  at prices
ranging  from  $.0625 to $0.35 per share.  The number of shares of common  stock
issuable  upon  conversion  of certain of the notes may be greater in the future
because the conversion  price is the lower of the specified  price or 50% of the
average  three  lowest  closing  prices for our common stock for the twenty days
immediately  preceding the conversion date. The exercise or conversion prices of
these  securities  are  generally  substantially  lower  than our  stock  price.
Therefore,  holders of our common stock and  potential  investors are subject to
substantial dilution if these securities are exercised or converted.

A DECLINE IN THE PRICE OF OUR COMMON  STOCK  COULD  AFFECT OUR  ABILITY TO RAISE
FURTHER WORKING CAPITAL AND ADVERSELY  IMPACT OUR ABILITY TO CONTINUE OUR NORMAL
OPERATIONS.

         A prolonged  decline in the price of our common stock could result in a
reduction in the liquidity of our common stock and a reduction in our ability to
raise capital.  Because our operations  primarily have been financed through the
sale of equity  securities,  a decline in the price of our common stock could be
particularly  detrimental to our liquidity and our operations.  We may be forced
to  reallocate  funds from other  planned  uses which  would have a  significant
negative effect on our business plans and  operations,  including our ability to
develop new products and  continue  our current  operations.  If our stock price
declines,  there can be no  assurance  that we will be able to raise  additional
capital or generate funds from operations sufficient to meet our obligations. If
we are unable to raise  sufficient  capital in the  future,  we may not have the
resources to continue our normal operations.

OUR HISTORIC  STOCK PRICE HAS BEEN  VOLATILE AND THE FUTURE MARKET PRICE FOR OUR
COMMON STOCK IS LIKELY TO CONTINUE TO BE VOLATILE.  FURTHER,  THE LIMITED MARKET
FOR OUR SHARES WILL MAKE OUR PRICE MORE VOLATILE. THIS MAY MAKE IT DIFFICULT FOR
YOU TO SELL OUR COMMON STOCK FOR A POSITIVE RETURN ON YOUR INVESTMENT.

         The  public  market  for our common  stock has  historically  been very
volatile.  Over the past two fiscal years, the market price for our common stock
has ranged  from  $0.06 to $3.85 (See  "Market  for  Common  Equity and  Related
Stockholder  Matters").  Any  future  market  price for our  shares is likely to
continue to be very volatile.  This price  volatility may make it more difficult
for you to sell  shares when you want at prices you find  attractive.  We do not
know of any one particular factor that has caused volatility in our stock price.
However,  the stock market in general has  experienced  extreme price and volume
fluctuations that have often been unrelated or disproportionate to the operating
performance  of  companies.  Broad  market  factors and the  investing  public's
negative  perception  of our business may reduce our stock price,  regardless of
our operating  performance.  Further, the market for our common stock is limited
and we  cannot  assure  you that a  larger  market  will  ever be  developed  or
maintained.  The daily  trading  volume of our  common  stock over the past nine
months averaged  approximately 710,690 shares. The last reported sales price for
our common stock on January 19, 2005, was $0.093 per share.  Market fluctuations
and volatility,  as well as general economic,  market and political  conditions,
could  reduce our  market  price.  As a result,  this may make it  difficult  or
impossible for you to sell our common stock.

OUR  COMMON  STOCK IS  SUBJECT  TO THE  "PENNY  STOCK"  RULES OF THE SEC AND THE
TRADING MARKET IN OUR  SECURITIES IS LIMITED,  WHICH MAKES  TRANSACTIONS  IN OUR
STOCK CUMBERSOME AND MAY REDUCE THE VALUE OF AN INVESTMENT IN OUR STOCK.

         The  Securities  and Exchange  Commission has adopted Rule 3a51-1 which
establishes the definition of a "penny stock," for the purposes  relevant to us,
as any equity  security  that has a market price of less than $5.00 per share or
with an  exercise  price of less  than  $5.00  per  share,  subject  to  certain
exceptions.  For any transaction  involving a penny stock,  unless exempt,  Rule
15g-9 requires:

     o    that a broker or dealer approve a person's account for transactions in
          penny stocks; and

     o    the broker or dealer receive from the investor a written  agreement to
          the transaction,  setting forth

                                       8
the identity and quantity of the penny stock to be purchased

         In order to  approve  a  person's  account  for  transactions  in penny
stocks, the broker or dealer must:

         o        obtain   financial   information  and  investment   experience
                  objectives of the person; and

         o        make a reasonable determination that the transactions in penny
                  stocks  are  suitable  for  that  person  and the  person  has
                  sufficient knowledge and experience in financial matters to be
                  capable  of  evaluating  the  risks of  transactions  in penny
                  stocks.

        The broker or dealer must also deliver,  prior to any  transaction  in a
penny stock, a disclosure  schedule  prescribed by the SEC relating to the penny
stock market, which, in highlight form:

         o        sets  forth the basis on which the  broker or dealer  made the
                  suitability  determination;  and

         o        that the broker or dealer received a signed, written agreement
                  from the investor prior to the transaction.

         Generally,  brokers  may be less  willing  to execute  transactions  in
securities  subject to the "penny stock" rules.  This may make it more difficult
for  investors  to dispose of our common stock and cause a decline in the market
value of our stock.

         Disclosure  also has to be made about the risks of  investing  in penny
stocks  in  both  public  offerings  and in  secondary  trading  and  about  the
commissions payable to both the broker-dealer and the registered representative,
current  quotations for the securities and the rights and remedies  available to
an  investor  in cases of fraud in penny stock  transactions.  Finally,  monthly
statements  have to be sent  disclosing  recent price  information for the penny
stock held in the account and information on the limited market in penny stocks.

                           FORWARD-LOOKING STATEMENTS

         Information in this prospectus  contains  "forward-looking  statements"
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section  21E  of  the  Securities  Exchange  Act  of  1934,  as  amended.  These
forward-looking  statements  can be  identified  by the  use of  words  such  as
"believes,"   "estimates,"  "could,"  "possibly,"   "probably,"   "anticipates,"
"projects," "expects," "may," "will," or "should" or other variations or similar
words.  No assurances  can be given that the future  results  anticipated by the
forward-looking  statements will be achieved.  The following matters  constitute
cautionary  statements  identifying  important  factors  with  respect  to those
forward-looking statements, including certain risks and uncertainties that could
cause actual results to vary materially  from the future results  anticipated by
those  forward-looking  statements.  Among  the key  factors  that have a direct
bearing on our results of  operations  are the  effects of various  governmental
regulations, the fluctuation of our direct costs and the costs and effectiveness
of our operating strategy.

                                 USE OF PROCEEDS

         This  prospectus  relates  to shares of our  common  stock  that may be
offered  and sold from  time to time by the  selling  stockholders.  We will not
receive any proceeds  from the sale of shares of common stock in this  offering.
However,  we will receive the sale price of any common stock we sell for cash to
the selling  stockholders  upon exercise of the  warrants.  We expect to use the
proceeds received from the exercise of the warrants, if any, for general working
capital purposes.

                                       9
SELLING STOCKHOLDERS

         The  following  table  presents   information   regarding  the  selling
stockholders as of January 21, 2005.  Assuming all the shares  registered hereby
are sold by the  selling  stockholders,  none of the selling  stockholders  will
continue  to own any  shares of our common  stock.  Unless  otherwise  indicated
below, (a) none of the selling stockholders has had a material relationship with
us or any of our predecessors or affiliates within the past three years, and (b)
none of the selling  stockholders is a registered  broker-dealer or an affiliate
of a registered broker-dealer.
NUMBER OF SHARES                                 SHARES BENEFICIALLY OWNED
                                                  BENEFICIALLY OWNED                                  AFTER THE OFFERING (3)
NAME                                           PRIOR TO THE OFFERING (1)   TOTAL SHARES OFFERED (2)   NUMBER        PERCENT
------------------------------------------------------------------------------------------------------------------------------------
AJW Offshore, Ltd. (4)                               3,822,500                   6,116,000               0             0%
AJW Partners, LLC (5)                                1,675,000                   2,680,000               0             0%
AJW Qualified Partners, LLC (6)                      4,242,500                   6,788,000               0             0%
Double U Master Fund LP (7)                          3,550,000                   5,680,000               0             0%
Enable Growth Partners L.P. (8)                     10,625,000                  17,000,000               0             0%
Kent A. Mc Naughton Living Trust (9)                    62,500                      62,500               0             0%
Leo Murphy (10)                                        687,500                     687,500               0             0%
Michael R. Hamblett (11)                             1,375,000                   2,200,000               0             0%
New Millennium Capital Partners II, LLC (12)           257,500                     412,000               0             0%
Platinum Partners Value Arbitrage Fund, LP           7,075,000                  11,320,000               0             0%
(13)
Robert B. Lange (14)                                 1,375,000                   1,375,000               0             0%
SRG Capital, LLC (15)                               11,875,000                  19,000,000               0             0%
Todd Mc Nitt (16)                                    1,312,500                   1,312,500               0             0%
Truk International Fund, LP (17)                       831,250                   1,330,000               0             0%
Truk Opportunity Fund, LLC (18)                     11,048,749                  17,669,999               0             0%
J.P. Turner & Company, L.L.C. (19)                   2,125,000                  12,185,045               0             0%
                                                    ----------                 -----------
                                                    61,939,999                 105,818,544
                                                    ==========                 ===========
(1)      Beneficial  ownership is determined in accordance with the rules of the
         Securities  and Exchange  Commission and generally  includes  voting or
         investment power with respect to securities.  Options and Warrants that
         are currently  exercisable or exercisable within 60 days of January 21,
         2005 are deemed to be  beneficially  owned by the person  holding  such
         securities  for the purpose of computing the percentage of ownership of
         such  person,  but are not  treated as  outstanding  for the purpose of
         computing the percentage ownership of any other person.

(2)      Includes a good faith  estimate of shares of common stock issuable upon
         the  exercise  of  common  stock  purchase   warrants  to  account  for
         antidilution  and price  protection  adjustments,  as  contemplated  by
         certain provisions of the Subscription Agreements.

(3)      Assumes that all securities registered will be sold and that all shares
         of common stock underlying outstanding warrants will be issued.

(4)      Includes (a)  1,529,000  shares of common stock,  (b) 2,293,500  shares
         issuable  upon  exercise of warrants,  and (c) up to  2,293,500  shares
         representing  our  current  good faith  estimate of  additional  shares
         issuable to

                                       10
the  holders of the  warrants  to account  for  antidilution  and price
         protection  adjustments,  as contemplated by certain  provisions of the
         Subscription  Agreements.  AJW Offshore,  Ltd. is a private  investment
         fund that is owned by its investors and managed by First Street Manager
         II, LLC.  First Street  Manager II, LLC, of which Corey S.  Ribotsky is
         the fund manager, has voting and investment control over the securities
         owned by AJW Offshore, Ltd.

(5)      Includes  (a) 670,000  shares of common  stock,  (b)  1,005,000  shares
         issuable  upon  exercise of warrants,  and (c) up to  1,005,000  shares
         representing  our  current  good faith  estimate of  additional  shares
         issuable to the holders of the warrants to account for antidilution and
         price protection adjustments,  as contemplated by certain provisions of
         the Subscription Agreements.  AJW Partners, LLC is a private investment
         fund that is owned by its investors and managed by SMS Group,  LLC. SMS
         Group,  LLC, of which Mr. Corey S.  Ribotsky is the fund  manager,  has
         voting  and  investment  control  over  the  securities  owned  by  AJW
         Partners, LLC.

(6)      Includes (a)  1,697,000  shares of common stock,  (b) 2,545,500  shares
         issuable  upon  exercise of warrants,  and (c) up to  2,545,500  shares
         representing  our  current  good faith  estimate of  additional  shares
         issuable to the holders of the warrants to account for antidilution and
         price protection adjustments,  as contemplated by certain provisions of
         the Subscription  Agreements.  AJW Qualified Partners, LLC is a private
         investment  fund  that is owned by its  investors  and  managed  by AJW
         Manager,  LLC, of which Corey S. Ribotsky and Lloyd A. Groveman are the
         fund managers,  have voting and investment  control over the securities
         owned by AJW Qualified Partners, LLC.

(7)      Includes (a)  1,420,000  shares of common stock,  (b) 2,130,000  shares
         issuable  upon  exercise of warrants,  and (c) up to  2,130,000  shares
         representing  our  current  good faith  estimate of  additional  shares
         issuable to the holders of the warrants to account for antidilution and
         price protection adjustments,  as contemplated by certain provisions of
         the  Subscription  Agreements.  Murray  Todd has voting and  investment
         control over the securities owned by Double U Master Fund LP.

(8)      Includes (a)  4,250,000  shares of common stock,  (b) 6,375,000  shares
         issuable  upon  exercise of warrants,  and (c) up to  6,375,000  shares
         representing  our  current  good faith  estimate of  additional  shares
         issuable to the holders of the warrants to account for antidilution and
         price protection adjustments,  as contemplated by certain provisions of
         the  Subscription  Agreements.  Mitch Levine has voting and  investment
         control over the securities owned by Enable Growth Partners LP.

(9)      Includes  currently  outstanding shares of common stock issued pursuant
         to a private placement completed in July 2004.

(10)     Includes  currently  outstanding shares of common stock issued pursuant
         to a private placement completed in July 2004.

(11)     Includes  (a)  550,000  shares  of common  stock,  (b)  825,000  shares
         issuable  upon  exercise  of  warrants,  and (c) up to  825,000  shares
         representing  our  current  good faith  estimate of  additional  shares
         issuable to the holders of the warrants to account for antidilution and
         price protection adjustments,  as contemplated by certain provisions of
         the Subscription Agreements.

(12)     Includes  (a)  103,000  shares  of common  stock,  (b)  154,500  shares
         issuable  upon  exercise  of  warrants,  and (c) up to  154,500  shares
         representing  our  current  good faith  estimate of  additional  shares
         issuable to the holders of the warrants to account for antidilution and
         price protection adjustments,  as contemplated by certain provisions of
         the Subscription  Agreements.  New Millennium Capital Partners II, LLC,
         is a private investment fund that is owned by its investors and managed
         by First Street Manager II, LLC. First Street Manager II, LLC, of which
         Corey S.  Ribotsky  is the fund  manager,  has  voting  and  investment
         control over the securities  owned by New Millennium  Capital  Partners
         II, LLC.

(13)     Includes (a)  2,830,000  shares of common stock,  (b) 4,245,000  shares
         issuable  upon  exercise of warrants,  and (c) up to  4,245,000  shares
         representing  our  current  good faith  estimate of  additional  shares
         issuable to the holders of the warrants to account for antidilution and
         price protection adjustments,  as contemplated by certain provisions of
         the Subscription  Agreements.  Mark Nordlicht has voting and investment
         control over the securities owned by Platinum  Partners Value Arbitrage
         Fund, LP.

(14)     Includes  currently  outstanding shares of common stock issued pursuant
         to a private placement completed in July 2004.

(15)     Includes (a)  4,750,000  shares of common stock,  (b) 7,125,000  shares
         issuable  upon  exercise of warrants,  and (c) up to  7,125,000  shares
         representing  our  current  good faith  estimate of  additional  shares
         issuable to the holders of the warrants to account for antidilution and
         price protection adjustments,  as contemplated by certain provisions of
         the Subscription  Agreements.  Edwin Mecabe and Tai May Lee have voting
         and investment control over the securities owned by SRG Capital, LLC.

                                       11
(16)     Includes  currently  outstanding shares of common stock issued pursuant
         to a private placement completed in July 2004.

(17)     Includes  (a)  332,500  shares  of common  stock,  (b)  498,750  shares
         issuable  upon  exercise  of  warrants,  and (c) up to  498,750  shares
         representing  our  current  good faith  estimate of  additional  shares
         issuable to the holders of the warrants to account for antidilution and
         price protection adjustments,  as contemplated by certain provisions of
         the Subscription Agreements.  Michael E. Fein has voting and investment
         control over the securities owned by Truk International Fund, LP.

(18)     Includes (a)  4,417,499  shares of common stock,  (b) 6,626,250  shares
         issuable upon exercise of outstanding warrants, and (c) up to 6,626,250
         shares  representing  our current  good faith  estimate  of  additional
         shares  issuable  to  the  holders  of  the  warrants  to  account  for
         antidilution  and price  protection  adjustments,  as  contemplated  by
         certain provisions of the Subscription Agreements.  Michael E. Fein has
         voting  and  investment  control  over  the  securities  owned  by Truk
         Opportunity Fund, LLC.

(19)     Includes (a) 2,125,000  shares  issuable  upon exercise of  outstanding
         warrants, (b) up to 4,227,939 shares issuable upon exercise of warrants
         to be issued to J.P. Turner & Company,  L.L.C. as a fee as contemplated
         by certain  provisions  of the  Subscription  Agreement,  and (c) up to
         5,832,106  shares  representing  our good faith  estimate of additional
         shares  issuable  to  the  holders  of  the  warrants  to  account  for
         antidilution  and price  protection  adjustments,  as  contemplated  by
         certain provisions of the Subscription Agreements. Timothy Wayne McAfee
         has voting and  investment  control over the  securities  owned by J.P.
         Turner  &  Company,   L.L.C.  J.P.  Turner  &  Company,   L.L.C.  is  a
         broker-dealer  that acquired these  securities as  compensation  in the
         ordinary course of business.

                              PLAN OF DISTRIBUTION

         The selling stockholders and any of their respective pledgees,  donees,
assignees and other  successors-in-interest  may, from time to time, sell any or
all of their  shares of common  stock on any stock  exchange,  market or trading
facility  on which the shares  are quoted or traded or in private  transactions.
These sales may be at fixed or negotiated prices.  The selling  stockholders may
use any one or more of the following methods when selling shares:

         o        ordinary brokerage  transactions and transactions in which the
                  broker-dealer solicits the purchaser;

         o        block trades in which the  broker-dealer  will attempt to sell
                  the shares as agent but may  position  and resell a portion of
                  the block as principal to facilitate the transaction;

         o        purchases by a  broker-dealer  as principal  and resale by the
                  broker-dealer for its account;

         o        an exchange  distribution  in accordance with the rules of the
                  applicable exchange;

         o        privately-negotiated  transactions;

         o        short  sales  that  are  not   violations   of  the  laws  and
                  regulations of any state or the United States;

         o        broker-dealers may agree with the selling stockholders to sell
                  a specified  number of such shares at a  stipulated  price per
                  share;

         o        through the writing of options on the shares;

         o        a combination of any such methods of sale; and

         o        any other method permitted pursuant to applicable law.

         The selling  stockholders may also sell shares under Rule 144 under the
Securities  Act, if available,  rather than under this  prospectus.  The selling
stockholders  have the sole and absolute  discretion  not to accept any purchase
offer  or make  any  sale of  shares  if they  deem  the  purchase  price  to be
unsatisfactory at any particular time.

         The  selling  stockholders  may also  engage  in puts,  calls and other
transactions  in our securities or derivatives of our securities and may sell or
deliver shares in connection with these trades.

         The  selling  stockholders  or  their  respective   pledgees,   donees,
transferees or other  successors in interest,  may also sell the shares directly
to market makers acting as principals and/or broker-dealers acting as agents for
themselves or their customers.  Such broker-dealers may receive  compensation in
the form of discounts,  concessions or commissions from the selling stockholders
and/or the purchasers of shares for whom such  broker-dealers  may act as agents
or to whom they sell as principal or both, which compensation as to a particular
broker-dealer  might be in excess of customary  commissions.  Market  makers and
block  purchasers  purchasing the shares will do so for their own account and at
their own risk. It is possible that a selling  stockholder  will attempt to sell
shares  of  common

                                       12
stock in block  transactions to market makers or other purchasers at a price per
share which may be below the then market price. The selling  stockholders cannot
assure that all or any of the shares offered in this  prospectus  will be issued
to, or sold by, the  selling  stockholders.  The  selling  stockholders  and any
brokers, dealers or agents, upon effecting the sale of any of the shares offered
in this prospectus,  may be deemed to be  "underwriters" as that term is defined
under the Securities Act of 1933, as amended,  or the Securities Exchange Act of
1934, as amended,  or the rules and regulations  under such acts. In such event,
any commissions  received by such broker-dealers or agents and any profit on the
resale  of the  shares  purchased  by  them  may be  deemed  to be  underwriting
commissions or discounts under the Securities Act.

         We  are  required  to  pay  all  fees  and  expenses  incident  to  the
registration of the shares,  including fees and  disbursements of counsel to the
selling  stockholders,   but  excluding  brokerage  commissions  or  underwriter
discounts.

         The selling  stockholders,  alternatively,  may sell all or any part of
the  shares  offered  in this  prospectus  through  an  underwriter.  No selling
stockholder  has entered into any agreement with a prospective  underwriter  and
there is no assurance that any such agreement will be entered into.

         The selling stockholders may pledge their shares to their brokers under
the margin provisions of customer agreements. If a selling stockholders defaults
on a margin loan, the broker may, from time to time,  offer and sell the pledged
shares. The selling stockholders and any other persons participating in the sale
or  distribution  of the shares  offered by this  prospectus  will be subject to
applicable  provisions of the Securities  Exchange Act of 1934, as amended,  and
the  rules  and  regulations  under  such act,  including,  without  limitation,
Regulation M. These provisions may restrict certain activities of, and limit the
timing of purchases  and sales of any of the shares by the selling  stockholders
or any other such person. In the event that the selling  stockholders are deemed
affiliated  purchasers  or  distribution  participants  within  the  meaning  of
Regulation M, then the selling  stockholders  will not be permitted to engage in
short sales of common stock. Furthermore, under Regulation M, persons engaged in
a  distribution  of securities are prohibited  from  simultaneously  engaging in
market making and certain other activities with respect to such securities for a
specified  period  of time  prior  to the  commencement  of such  distributions,
subject to specified  exceptions or exemptions.  In regards to short sells,  the
selling  stockholder  can only cover its short position with the securities they
receive from us upon conversion. In addition, if such short sale is deemed to be
a stabilizing  activity,  then the selling  stockholder will not be permitted to
engage in a short sale of our common stock. All of these  limitations may affect
the marketability of the shares.

         We  have  agreed  to  indemnify  the  selling  stockholders,  or  their
transferees or assignees,  against certain  liabilities,  including  liabilities
under the Securities  Act of 1933, as amended,  or to contribute to payments the
selling stockholders or their respective pledgees,  donees, transferees or other
successors in interest, may be required to make in respect of such liabilities.

         If the  selling  stockholders  notify  us  that  they  have a  material
arrangement  with a  broker-dealer  for the resale of the common stock,  then we
would be required to amend the  registration  statement of which this prospectus
is a part, and file a prospectus  supplement to describe the agreements  between
the selling stockholders and the broker-dealer.

                            DESCRIPTION OF SECURITIES

CAPITAL STRUCTURE

         Our authorized  capital consists of 600,000,000 shares of common stock,
par value $.001 per share and 80,000 shares of preferred  stock,  par value $.01
per share.  As of January 21,  2005 we had  213,873,410  shares of common  stock
outstanding and zero shares of preferred stock outstanding.

COMMON STOCK

         Holders of our common stock: (i) have equal ratable rights to dividends
from funds legally available therefor,  when, as and if declared by the Board of
Directors; (ii) are entitled to share ratably in all of our assets available for
distribution to stockholders upon liquidation,  dissolution or winding up of our
affairs;  (iii) do not have preemptive,  subscription or conversion  rights, nor
are there any redemption or sinking fund provisions applicable

                                       13
thereto;  and (iv) are  entitled  to one vote per share on all  matters on which
stockholders  may vote at all  shareholder  meetings.  The common stock does not
have cumulative  voting rights,  which means that the holders of more than fifty
percent of the common  stock  voting for  election  of  directors  can elect one
hundred percent of our directors if they choose to do so.

PREFERRED STOCK

         Our  Articles of  Incorporation  authorize  80,000  shares of preferred
stock,  $.01 par value per share. Our Board of Directors,  without any action by
stockholders,  is authorized to divide the authorized  shares of preferred stock
into  series  and  to  designate   the  rights,   qualifications,   preferences,
limitations and terms of the shares of any series of preferred stock,  including
but not limited to dividend,  redemption,  voting  rights and  preferences.  The
ability of our Board of  Directors  to  designate  and issue such  shares  could
impede  or deter  an  unsolicited  tender  offer or  takeover  proposal  and the
issuance of additional shares having  preferential rights could affect adversely
the voting power and other rights of holders of our common stock.

         We have not filed a  certificate  of  designation  with  respect to any
series of preferred  stock.  During the year ended June 30,  2003,  we agreed to
issue a total of 71,529  shares of Series A Preferred  Stock as  collateral  for
secured notes. The parties have  subsequently  agreed to cancel the transaction.
On December  31,  2003,  we agreed to issue  8,471  shares of Series A Preferred
Stock to two  stockholders of record in exchange for 3,325,000  shares of common
stock  of  Material  Technologies,  Inc.  On  May 7,  2004,  we  rescinded  this
transaction. Accordingly, we currently do not have any shares of preferred stock
issued or outstanding.

JULY 2004 PRIVATE PLACEMENT

         In July 2004, we completed a private  placement  transaction  with four
accredited  investors,  pursuant to which we sold (1) an  aggregate  of $625,000
principal amount 8% convertible debentures, and (2) warrants to purchase 312,500
shares of our common  stock.  From this  private  placement  we  received  gross
proceeds of  $625,000.  On  September  13,  2004,  we  pre-paid  $312,500 of the
principal  amount of the 8% convertible  debentures  and the remaining  $312,500
principal amount was converted into 3,125,000  shares of our common stock.  Also
on September 13, 2004,  all of the warrants  were  exercised at a price of $0.15
per share  into  312,500  shares of our common  stock.  The  issuance  of the 8%
convertible  debentures,  the  warrants,  and the  shares of common  stock  upon
conversion and exercise of the 8% convertible debentures and warrants was exempt
from  registration  under Rule 506 of  Regulation  D and/or  Section 4(2) of the
Securities  Act of  1933,  as  amended.  We are  registering  in  this  offering
3,437,500  shares  of  common  stock  owned  by the  investors  in this  private
placement  from  the  conversion  of  their 8%  convertible  debentures  and the
exercise of common stock purchase warrants.  J.P. Turner & Company, LLC acted as
placement agent for this  transaction.  For its services as placement  agent, we
issued J.P. Turner & Company, LLC a warrant to purchase 520,833 shares of common
stock,  exercisable  for three years at an exercise price of $0.12 per share. We
are also  registering  in this offering  520,833 shares of common stock issuable
upon exercise of the warrant held by J.P. Turner & Company, LLC.

SEPTEMBER AND NOVEMBER 2004 PRIVATE PLACEMENT

         On September  13, 2004,  we completed a private  placement  transaction
with eleven  accredited  investors,  pursuant to which we sold an  aggregate  of
3,666,447 shares of common stock, 1,833,227 Series A Warrants,  1,833,227 Series
B Warrants and 1,833,227  Series C Warrants (the "First  Closing").  We received
gross proceeds approximating $1,650,000. For each two shares of common stock, we
issued investors one A Warrant, one B Warrant and one C Warrant. Each two shares
and three  warrants were sold at a total price of $0.90.  The private  placement
was exempt from  registration  under Rule 506 of Regulation D of the  Securities
Act of 1933, as amended.

         On November 4, 2004, we completed a private placement  transaction with
the  same  investors  from  the  First  Closing,  pursuant  to  which we sold an
aggregate  of 6,050,000  shares of common  stock,  3,025,000  Series A Warrants,
3,025,000  Series B  Warrants  and  3,025,000  Series C  Warrants  (the  "Second
Closing").  We received gross proceeds totaling $605,000. For each two shares of
common  stock,  we issued  investors  one A  Warrant,  one B  Warrant  and one C
Warrant. Each two shares and three warrants were sold at a total price of $0.20.
The private  placement was deemed exempt from  registration  requirements  under
Rule 506 of Regulation D of the  Securities  Act of 1933. We are  registering in
this offering  6,050,000  shares of common stock and 18,150,000  shares issuable
upon

                                       14
exercise of these outstanding warrants,  which includes a good faith estimate of
shares  of  common  stock to  account  for  antidilution  and  price  protection
adjustments,   as  contemplated  by  certain   provisions  of  the  Subscription
Agreements.  The terms of the Subscription Agreements and warrants prohibit each
investor  together with its  affiliates  from  exercising  any right which would
result in its beneficial  ownership of more than 9.99% of our outstanding common
stock.

         The Second Closing triggered certain repricing adjustments to the terms
of the First Closing.  Accordingly, the purchase price for the First Closing was
adjusted  to $0.20 for each two shares  and three  warrants  that were sold.  As
adjusted,  we are obligated to issue an additional  12,832,552  shares of common
stock, 6,416,273.  Series A Warrants,  6,416,273 Series B Warrants and 6,416,273
Series C Warrants.  For the First Closing,  we are  registering in this offering
16,498,999  shares of common stock and 49,497,000  shares issuable upon exercise
of warrants,  which  includes a good faith estimate of shares of common stock to
account for further antidilution and price protection adjustments.  The terms of
the  Series A  Warrants,  the Series B Warrants  and the Series C  Warrants,  as
adjusted are as follows:

         We agreed to file with the Securities and Exchange Commission not later
than 30 days  after the  closing  date of the  Second  Closing,  and cause to be
effective  within  120 days after the  closing  date of the  Second  Closing,  a
registration statement in order to register the shares of common stock issued to
the  investors  and the shares  underlying  the  warrants,  including the shares
issuable  upon  exercise  of  warrants  issued to the  placement  agent.  If the
registration  statement is not filed on or before the required filing date or if
the registration  statement is not declared  effective on or before the required
effective date, then we must pay as liquidated  damages, an amount equal to 1.5%
for each 30 days or part  thereof,  and  thereafter  2% for each 30 days of part
thereof of the purchase price of the shares and warrant shares.  We must pay any
liquidated  damages in cash. The warrants  further  provide that if the required
filing and registration  dates are not met, upon written demand by a holder,  we
must pay to such holder, in lieu of delivering common stock, a sum in cash equal
to the  closing  price of our  common  stock  on the  trading  date  immediately
preceding the date notice is given by the holder,  less the exercise price,  for
each  share of common  stock  designated  in the  notice  from such  holder.  In
addition,  on one  occasion,  for a period  commencing 91 days after the closing
date of the Second Closing,  but not later than two years after the closing date
of the Second  Closing,  upon written request of the holders of more than 50% of
the shares and warrant shares actually issued upon exercise of warrants,  we are
required  to  prepare  and  file  a  registration   statement  in  the  event  a
registration statement covering the resale of such shares and warrant shares has
not been filed.  The A Warrants  expire 150 days from the date the  registration
statement is declared  effective by the Securities  and Exchange  Commission and
are  exercisable at $0.12 per share.  The B Warrants expire four years after the
date the  registration  statement is declared  effective by the  Securities  and
Exchange  Commission  and are  exercisable  at $0.15 per  share.  The C Warrants
expire  three  years  after  the date the  registration  statement  is  declared
effective by the Securities and Exchange Commission and are exercisable at $0.50
per share.

         We may call the warrants  beginning 30 trading days after the effective
date of the  registration  statement  and  ending 30  trading  days  before  the
expiration of the warrants.  A call notice may be given by us for the A Warrants
only within five trading days after the common stock has had a closing  price as
reported for the principal market of $0.24 or higher for 15 consecutive  trading
days.  A call  notice may be given by us for the B  Warrants  only  within  five
trading days after the common stock has had a closing  price as reported for the
principal  market of $0.30 or higher for 15  consecutive  trading  days.  A call
notice may be given by us for the C Warrants only within five trading days after
the common stock has had a closing price as reported for the principal market of
$1.00 or higher for 15 consecutive trading days.

         Beginning  November 4, 2004 and until the  registration  statement  has
been  effective for 150 days,  the investors must be given at least ten business
days prior  written  notice of any  proposed  sale by us of our common  stock or
other  securities or debt  obligations  except in  connection  with (a) employee
stock  options or  compensation  plans,  (b)  documented  legal fees, or (c) our
already  issued and  outstanding  shares of common stock as of the closing date.
Such proposed sales are referred to as "excepted issuances."

         Other  than  the  excepted   issuances,   if  at  any  time  until  the
registration statement has been effective for 150 days, we offer, issue or agree
to issue any common stock or  securities  convertible  into or  exercisable  for
shares of common stock (or modify any of the foregoing  which may be outstanding
at any time  prior to the  closing  date) to any person or entity at a price per
share or conversion or exercise  price per share which shall be less than $0.10,

                                       15
without the consent of each  investor,  then we are required to issue,  for each
such  occasion,  additional  shares of common stock to each investor so that the
average per share  purchase price of the shares of common stock and the warrants
issued to the investor  (of only the common stock or warrant  shares still owned
by the  investor) is equal to such other lower price per share.  For purposes of
this issuance and adjustment, the issuance of any security carrying the right to
convert such security into shares of common stock will result in the issuance of
the  additional  shares of common  stock upon the  issuance of such  convertible
security,  warrant,  right or option and again upon any subsequent  issuances of
shares of common stock upon exercise of such  conversion  or purchase  rights if
such issuance is at a price lower than $0.10.

         The exercise price of the warrants is also subject to adjustment in the
event we effect a  reorganization,  consolidation or merger,  or transfer all or
substantially  all of our properties or assets.  Also, until the expiration date
of the  warrants,  if we issue any common stock other than  excepted  issuances,
prior to the complete exercise of the warrants for a consideration less than the
warrant  exercise price that would be in effect at the time of such issue,  then
the  exercise  price  shall be reduced  to such other  lower  issue  price.  For
purposes of this  adjustment,  the issuance of any  security or debt  instrument
carrying the right to convert such security or debt instrument into common stock
or of any warrant,  right or option to purchase  common stock shall result in an
adjustment  to the  exercise  price  upon the  issuance  of the  above-described
security, debt instrument, warrant, right, or option.

PLACEMENT AGENT FEE FOR THE FIRST CLOSING

         J.P.  Turner &  Company,  LLC  acted as  placement  agent for the First
Closing and for the Second Closing. For the First Closing, we agreed to pay J.P.
Turner & Company a cash fee of 8% of the aggregate  purchase price. We will also
pay J.P. Turner & Company 8% of the cash proceeds  received from the exercise of
warrants  issued in connection with the placement.  In addition,  we issued J.P.
Turner &  Company  a  warrant  to  purchase  458,306  shares  of  common  stock,
exercisable  for five years at an exercise price of $0.54 per share.  Due to the
price adjustments  caused by the Second Closing,  this warrant was cancelled and
we issued J.P. Turner & Company a warrant to purchase 1,100,000 shares of common
stock,  exercisable  for five  years at an  exercise  price of $0.12 per  share.
Further,  J.P.  Turner &  Company  will  receive:  (a) one  Placement  Agent's A
Warrant,  exercisable at $0.14 per share, for each eight A Warrants exercised by
an investor on a cash basis; (b) one Placement Agent's B Warrant, exercisable at
$0.18 per share,  for each eight B Warrants  exercised  by an investor on a cash
basis; and (c) one Placement Agent's C Warrant,  exercisable at $0.60 per share,
for  each  eight C  Warrants  exercised  by an  investor  on a cash  basis.  All
Placement  Agent's  Warrants are exercisable for five years after the respective
issue dates, are not subject to call and may be exercised on a cashless basis.

PLACEMENT AGENT FEE FOR THE SECOND CLOSING

         For the Second  Closing,  we agreed to pay J.P. Turner & Company a cash
fee of 10% of the  aggregate  purchase  price.  We will  also pay J.P.  Turner &
Company 8% of the cash proceeds received from the exercise of warrants issued in
connection  with the  placement.  In addition,  we issued J.P.  Turner & Company
warrants to purchase 504,167 shares of common stock,  exercisable for five years
at an exercise  price of $0.12 per share.  Further,  J.P.  Turner & Company will
receive:  (a) one Placement  Agent's A Warrant,  exercisable at $0.14 per share,
for each eight A Warrants  exercised  by an investor  on a cash  basis;  (b) one
Placement  Agent's B Warrant,  exercisable at $0.18 per share,  for each eight B
Warrants exercised by an investor on a cash basis; and (c) one Placement Agent's
C Warrant,  exercisable at $0.60 per share, for each eight C Warrants  exercised
by an investor on a cash basis.  All Placement  Agent's Warrants are exercisable
for five years after the respective issue dates, are not subject to call and may
be exercised on a cashless basis. We are registering in this offering a total of
11,664,212  shares issuable upon exercise of warrants issued or issuable to J.P.
Turner & Company  pursuant to the First  Closing and the Second  Closing,  which
includes a good faith  estimate of shares of common stock to account for further
antidilution and price protection adjustments.

                                       16
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

MARKET INFORMATION

         Our common stock is currently quoted on the  Over-The-Counter  Bulletin
Board under the symbol ACUP. For the periods indicated, the following table sets
forth the high and low bid  prices  per  share of our  common  stock.  The below
prices represent  inter-dealer  quotations without retail markup,  markdown,  or
commission and may not necessarily represent actual transactions.

                                                     Fiscal 2005
                                                  ------------------
                                                   High         Low
                                                  ------------------
First Quarter Ended September 30, 2004            $1.44        $0.19
Second Quarter Ended December 31, 2004            $0.28        $0.06

                                                     Fiscal 2004
                                                  ------------------
                                                   High         Low
                                                  ------------------
First Quarter Ended September 30, 2003            $2.00        $0.81
Second Quarter Ended December 31, 2003            $1.75        $1.35
Third Quarter Ended March 31, 2004                $3.85        $1.44
Fourth Quarter ended June 30, 2004                $3.57        $0.90

                                                     Fiscal 2003
                                                  ------------------
                                                   High         Low
                                                  ------------------
First Quarter Ended September 30, 2002            $1.24        $0.85
Second Quarter Ended December 31, 2002            $1.70        $0.51
Third Quarter Ended March 31, 2003                $1.70        $0.60
Fourth Quarter Ended June 30, 2003                $1.14        $0.46

         As of January 21, 2005, there were approximately  1,948 stockholders of
record of our common stock.  Our registrar and transfer agent is Signature Stock
Transfer,  Inc., One Preston Park, 2301 Ohio Dr., Suite 100, Plano, Texas 75093;
telephone (972) 612-4120.

DIVIDEND POLICY

         We have not adopted any policy  regarding  the payment of  dividends on
our common stock. We do not intend to pay any cash dividends on our common stock
in the  foreseeable  future.  All cash  resources are expected to be invested in
developing our business.  There are no restrictions  that  materially  limit our
ability to pay cash dividends.

                                       17
SELECTED FINANCIAL DATA

         The following  information  presents selected  financial data since the
inception of AccuPoll, Inc. in August 2001.
-------------------------------------------------------------------------------------------------------------------------------
                                               ACCUPOLL HOLDING CORP. AND SUBSIDIARIES
                                                     CONSOLIDATED BALANCE SHEETS
-------------------------------------------------------------------------------------------------------------------------------
                                                                                                     June 30
                                                                                   --------------------------------------------
                                                                   September 30,                  (As Restated)
                                                                       2004            2004            2003            2002
                                                                    (Unaudited)
                                                                   ------------    ------------    ------------    ------------
                                ASSETS
CURRENT ASSETS
           Cash                                                    $    773,961    $    113,789    $         --    $    287,159
           Accounts receivable, net                                     303,895         254,895              --              --
           Note Receivable                                              375,549              --              --         300,000
           Inventories                                                       --         168,636              --              --
           Deferred acquisition costs                                        --              --         144,206              --
           Prepaid expenses                                                  --              --           2,500         156,000
                                                                   ------------    ------------    ------------    ------------
           Total Current Assets                                       1,453,404         537,320         146,706         743,159

PROPERTY AND EQUIPMENT, net                                              14,174          14,012              --              --
CAPITALIZED SOFTWARE DEVELOPMENT COSTS, net                           1,855,532       2,544,207       1,403,899              --
OTHER ASSETS                                                             26,765          26,246              --         241,966
                                                                   ------------    ------------    ------------    ------------
           TOTAL ASSETS                                            $  3,349,875    $  3,121,785    $  1,550,605    $    985,125
                                                                   ============    ============    ============    ============

               LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
           Accounts payable and accrued expenses                   $  1,693,461    $  1,817,284    $    931,503    $    176,292
           Related party payables                                     1,214,070       1,228,070         872,940         101,020
           Deferred revenues                                             35,387          74,628              --              --
           Convertible debt                                           3,817,100       3,304,600              --              --
           Notes payable to related parties                              20,000          30,000         175,000              --
           Put liability related to warrant issuance                    163,760         163,760         113,750              --
           Liabilities subject to compromise                            732,470         732,544              --              --
                                                                   ------------    ------------    ------------    ------------
           TOTAL LIABILITIES                                          7,676,248       7,350,886       2,093,193         277,312
                                                                   ------------    ------------    ------------    ------------

EQUITY INSTRUMENTS SUBJECT TO RESCISSION (A)                          6,300,000       6,200,000       4,377,033              --
                                                                   ------------    ------------    ------------    ------------
STOCKHOLDERS' DEFICIT

           Convertible Series A preferred stock, $0.01 par value,
             80,000 shares authorized, no shares issued or
             outstanding (liquidation preference of zero)                    --              --              --              --
           Common stock, par value of $0.001, 600,000,000
             shares authorized                                          183,850         158,482         112,946         102,797
           Common subscription receivable                                    --              --              --         (12,500)
           Additional paid-in capital                                15,511,249      12,046,817       2,222,580       3,024,096
           Accumulated deficit                                      (26,321,472)    (22,634,400)     (7,255,147)     (2,406,580)
                                                                   ------------    ------------    ------------    ------------
                                                                    (10,626,373)    (10,429,101)     (4,919,621)        707,813
                                                                   ------------    ------------    ------------    ------------
           TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT             $  3,349,875    $  3,121,785    $  1,550,605    $    985,125
                                                                   ============    ============    ============    ============

           Common shares outstanding                                183,849,710     158,482,171     112,945,963     102,797,408
                                                                   ============    ============    ============    ============
18
ACCUPOLL HOLDING CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months
                                           Ended                          (As Restated)
                                        September 30,      Year Ended      Year Ended      Period Ended
                                            2004         June 30, 2004    June 30, 2003    June 30, 2002
                                         (unaudited)
                                        -------------    -------------    -------------    -------------
NET SALES                               $     494,244    $   1,508,656    $          --    $          --
COST OF SALES                                 329,357        1,185,797               --               --
                                        -------------    -------------    -------------    -------------
GROSS PROFIT                                  164,887          322,859               --               --
EXPENSES
  General and administrative                1,315,155        3,160,257        3,104,192          904,083
  Professional fees                         2,191,277        4,264,156        1,714,475        1,198,622
  Interest                                    345,527        4,534,947           29,900          303,875
  Loss on disposal of investment                   --        1,200,000               --               --
  Impairment of goodwill (B)                       --        2,542,752               --               --
                                        -------------    -------------    -------------    -------------
                                            3,851,959       15,702,112        4,848,567        2,406,580
                                        -------------    -------------    -------------    -------------
NET LOSS                                $ (3,687,072)    $ (15,379,253)   $  (4,848,567)   $  (2,406,580)
                                        =============    =============    =============    =============
BASIC AND DILUTED LOSS
    PER COMMON SHARE                    $       (0.02)   $       (0.12)   $       (0.05)   $       (0.04)
                                        =============    =============    =============    =============
WEIGHTED AVERAGE NUMBER OF COMMON
    SHARES OUTSTANDING                    175,165,060      130,782,481      106,687,447       68,735,272
                                        =============    =============    =============    =============
(A)      Includes  estimated  liability  (at  estimated  fair value)  related to
         equity  instruments  sold without  registration  and therefore,  may be
         subject to rescission.  See Note 2 to our quarterly report on Form 10-Q
         for the quarter ended September 30, 2004..

(B)      On March 31, 2004,  the  Company's  wholly owned  subsidiary  (Z prompt
         Inc.) filed for bankruptcy.  In connection with the bankruptcy  filing,
         the Company recorded an impairment  charge of approximately  $2,543,000
         to write  off the  goodwill  associated  with the  acquisition  of this
         subsidiary.  See Note 1 -  "Impairment  of Long  Lived  Assets"  to the
         annual financial statements on Form 10-K/A as of June 30, 2004.

                             DESCRIPTION OF BUSINESS

INTRODUCTION

         We develop and market computerized voting machines and their associated
products and services for use in federal, state, local and private elections. We
have  developed a direct  recording  electronic  voting  system that  provides a
voter-verified  paper audit trail that is both human and machine  readable.  Our
system was qualified as meeting certain federal voting system standards on March
25, 2004 (as fully described above in the "Risk Factors" section) and we believe
that it is currently the only electronic  voting system providing these features
that is so qualified.  Key benefits of our voting system  include:  an intuitive
touch screen interface, an audit capability that includes multiple copies of the
electronic records and a voter-verified paper audit trail that is both human and
machine  readable.  Additional  benefits include the ability to support multiple
languages,  to prevent  overvotes,  to provide under-vote  warnings,  the use of
software based on open source products (e.g.,  Linux) and open standards  (e.g.,
XML, Unicode, Java), and the use of non-proprietary hardware.

         As of September 22, 2004, our direct recording electronic voting system
was certified by the states of Alabama, Arkansas, Kentucky,  Mississippi,  Ohio,
South  Dakota,  Utah and West  Virginia.  Currently,  we are in the  process  of
applying for certification in additional states.

         Our objective is to protect citizens' right to vote by insuring access,
accuracy,  privacy and integrity in the voting process and in so doing to become
the leading  provider of polling  place  electronic  voting  solutions  that are
reliable, accurate, immediate,  confidential, secure, easy-to-use and auditable.
Our website address is www.accupoll.com.

         We are  subject to the  informational  requirements  of the  Securities
Exchange  Act of  1934,  and in  accordance  therewith  file  reports,  proxy or
information  statements and other  information  with the Securities and Exchange
Commission.  Such  reports,  proxy  statements  and  other  information  can  be
inspected  and  copied at the

                                       19
public reference facilities maintained by the Commission at Judiciary Plaza, 450
Fifth  Street,  N.W.,  Washington,  D.C.  20549.  Copies of such material can be
obtained from the Public Reference Section of the Commission at Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C.20549, at prescribed rates. In addition,
the Commission maintains a web site that contains reports, proxy and information
statements and other information  regarding registrants that file electronically
with  the   Commission.   The   address   of  the   Commission's   web  site  is
http://www.sec.gov.

         We are in  the  process  of  building  a  section  of  our  website  at
www.accupoll.com  to make available our reports that we file with the Securities
and Exchange  Commission.  Until this section of our website is operational,  we
voluntarily provide paper copies of our filings free of charge upon request.

CORPORATE HISTORY

         We were  incorporated  in the State of Nevada on January  30, 1985 with
the name "Kiwi  Ventures,  Ltd." On  November  4, 1985,  we changed  our name to
"Western  International Pizza Corporation" and owned and operated 17 Godfather's
pizza  franchise  restaurants  in Arizona  until we ceased those  operations  in
approximately 1990.

         Our  current  operations  began in August  2001 with the  formation  of
AccuPoll, Inc., a Delaware corporation. On May 20, 2002, we entered into a share
exchange with AccuPoll,  Inc.  Pursuant to the exchange,  all of the outstanding
common stock and warrants of AccuPoll,  Inc. were exchanged for our shares. As a
result of the exchange,  the stockholders of AccuPoll,  Inc. acquired 75,500,000
shares of our common stock, which represented  approximately 98.7% of our issued
and  outstanding  common stock  immediately  after the  exchange.  Following the
exchange, we changed our name to "AccuPoll Holding Corp."

INDUSTRY BACKGROUND

         Elections, especially those in democratic countries, are held under the
auspices of various  government  systems.  Until the 1960's almost all elections
were   conducted   with   manually   counted   pre-printed   paper  ballots  and
lever-activated  mechanical  voting machines,  commonly known as lever machines.
Lever  machines,  which are  cumbersome to use and consist of hundreds of moving
parts,  require  significant  maintenance  and are  expensive to  warehouse  and
transport.  This method of voting and  recording of votes,  in addition to being
inefficient,  was susceptible to inaccuracies,  significant  time delays,  other
mechanical  difficulties,  and in some  instances  manipulation.  In  1964,  the
Votomatic punch card voting system was patented.  While this system has not been
actively  manufactured  since the mid 1980s,  it remains  the most  widely  used
system in North America.  In the early 1980's,  optical scan voting systems were
introduced  and began to  penetrate  the  election  equipment  market place on a
relatively  small  scale.  According  to a  study  conducted  by the  California
Institute  of  Technology  and  Massachusetts  Institute of  Technology,  market
penetration  for optical scan voting  systems  grew to slightly  over 25% of the
installed voting machine base nationwide as of July 2001.

         In recent years, the election industry began to computerize in response
to increased public acceptance and familiarity with using computers. The benefit
of computers is that they offer the opportunity to count ballots  accurately and
quickly.  Additionally,  computer  technology has created the potential for more
convenient   participation,   accessibility   for   disabled   voters   to  vote
independently  and the  elimination  of pre-printed  paper ballots.  Service and
support  have  also  become  increasingly  important  components  of the  newer,
technologically  advanced voting systems.  While the employment of technology is
becoming more generally accepted,  we believe that many voting systems currently
being marketed lag in the application of state-of-the-art computer technology.

         To our knowledge, of the voting systems on the market produced and sold
by the four largest voting system vendors  (Diebold  Election  Systems,  Sequoia
Voting Systems,  Election Systems + Software and Hart InterCivic),  only Sequoia
Voting Systems  currently  produces a direct recording  electronic voting system
with a  voter-verified  paper audit trail.  Many of our competitors  continue to
receive poor  reviews  from the  academic,  information-security  and  political
communities  for  inadequate  security,  deficient  software  coding  standards,
inadequate change management practices, and lack of a voter verified paper audit
trail.  We  believe  that  some  of  these  systems  continue  to  operate  with
non-certified software, and lack flexible functionality.

                                       20
Direct recording  electronic voting systems are computer-based  systems
first and voting appliances second. Because every computer system is susceptible
to programming  bugs and/or  possible  tampering,  we believe that  computerized
voting systems must provide for an  independent,  voter verified  record of each
voter's intent.  We believe that in order to provide a system that the voter can
have  confidence in, we must provide a voter with a  voter-verified  paper audit
trail. Our direct recording  electronic voting system provides for both a secure
electronic  recording  of the voting  process  and an  indelible  voter-verified
paper-audit  trail that  satisfies  the  federal  voting  system  standards  for
record-keeping that is maintained independently from the electronic results.

MARKET OPPORTUNITY

         The U.S.  presidential  election of November 2000 had a significant and
disruptive impact on the nation. According to a report from California Institute
of Technology  and  Massachusetts  Institute of  Technology,  approximately  1.5
million votes were lost in 2000 because of  difficulties  in either using voting
equipment or recording the results of those votes. The difficulties  experienced
with accuracy and  verifiability,  particularly  with punch card  systems,  have
generated   opportunities   for  manufacturers  of  electronic  voting  systems.
Following the 2000 election, the U.S. Congress enacted the Help America Vote Act
of 2002,  or HAVA.  HAVA was signed  into law by  President  Bush on October 29,
2002. HAVA expanded the federal government's role in elections through mandates,
standards and funding.  The U.S. Congress  authorized a total of $3.9 billion to
help states  implement  HAVA. In 2003,  $650 million was disbursed to the states
under HAVA. Of this $650 million,  half of the funds were  designated to replace
punch card and lever voting machines and the balance could be used by the states
to comply with HAVA's  requirements  and  implement  other  improvements  to the
administration  of  elections.  An  additional  $3 billion is authorized to help
states fund HAVA's  requirements for updating voting systems,  allowing disabled
voters  to vote  independently,  providing  provisional  ballots,  creating  and
maintaining  statewide  voter  registration  lists,  training poll workers,  and
educating  voters.  These  funds  are  distributed  to  states  annually  over a
three-year  period after  individual  states  certify that they have developed a
plan to use the funds to implement HAVA requirements.  States are also obligated
to  provide a five  percent  match.  Beginning  in May 2004,  the newly  created
Elections  Assistance  Commission began receiving state  certifications,  and as
each state's certification is processed,  funds will be disbursed.  Beginning on
January 1, 2006, HAVA requires that state voting systems:

         o        Permit  the voter to review the votes  selected  and change or
                  correct votes before the ballot is cast;

         o        Notify  the voter if he or she casts  more than one vote for a
                  single  office and  provide  an  opportunity  to  correct  the
                  ballot;

         o        Produce a permanent paper record with a manual audit capacity;

         o        Provide disability access,  including nonvisual access for the
                  blind and  visually  impaired,  in a manner that  provides the
                  same  opportunity  for  access  and  participation  (including
                  privacy and independence) as for other voters;

         o        Provide alternative language accessibility; and

         o        Comply with error rate standards.

         Further, each state is required to adopt uniform and non-discriminatory
standards for what constitutes a vote and how it will be counted.

         According to the National Association of Secretaries of State there are
approximately  200,000  polling  places in the  United  States,  covering  7,000
jurisdictions,  with 1.4 million  polling  place  workers  supervised  by 22,000
election officials.  According to surveys conducted by the National  Association
of  Counties  the  typical  polling  place in the  United  States  is  currently
configured to contain an average of seven voting stations.  On election day, the
100 million  voters in the United  States use over 1.4 million  voting  machines
where  approximately  60% of the voting  sites are  currently  using  antiquated
punch, lever, or paper ballot technologies. These are the same machine types for
which HAVA mandates  replacement by 2006. We are targeting  these polling places
with our touch-screen electronic direct recording electronic voting product.

                                       21
OUR PRODUCTS

         The AccuPoll direct recording  electronic voting system consists of one
or more voting  stations  that offer voters an  "ATM-like"  interface,  and that
prepare and print voter verified paper records, also known as "Proof of Vote" or
"voter  verified  paper  audit  trail,"  for  machine  or  hand  counting.  Each
in-precinct  voting  station is  physically  connected  by means of a local area
network to a voting administrative workstation. The entire in-precinct system is
not  connected to any network  outside of the polling place during voting hours.
The  user-friendly  touch  screen  interface  provides  the user  easy to follow
instructions.  The system is compact, sturdy and has an estimated useful life of
at least five years.

         Once a voter  makes his or her  choices,  a Proof of Vote is printed on
paper by the voting  station.  The voter can then  examine the Proof of Vote for
accuracy  before  depositing it into a ballot box. If the Proof of Vote does not
accurately  reflect  the  voter's  intent,  that voter can then notify a polling
place  official.  The  official  will then void the  electronic  ballot  and its
corresponding Proof of Vote, and allow the voter to re-vote. Importantly,  while
the Proof of Vote is printed, the voter's electronic ballot is stored locally on
the voting  station and is also  immediately  transmitted  to the polling  place
voting administrative workstation. Thus, when the polling place closes, multiple
redundant  copies of the  electronic  ballots are  available  in addition to the
paper Proofs of Vote. At no time is the voter's identity  associated with either
the electronic  ballot or the paper Proof of Vote.  Accordingly,  each ballot is
securely  stored  in  multiple  locations  and in  forms  that  can  be  readily
cross-audited against each of the other ballot representations.

         We have based our system  software on open  standards  (JAVA  language,
Unicode,  and XML for the ballot and behavior  specifications).  As a result, we
have eliminated the need to deploy  proprietary  technologies that are expensive
to acquire and maintain and which we believe often lack the flexibility to adapt
quickly to meet changing voting system standards.  Our solutions are scalable in
the software and hardware design.  Our hardware  components are "off the shelf",
and replacement parts, such as printers, are readily available, thereby reducing
maintenance costs and unit downtime.

         We  have  designed  our  product  with  both  the  voter  and  election
administrator in mind. To our knowledge,  we have created the only voting system
that has been  qualified as meeting  federal  voting  system  standards and that
offers a  voter-verified  paper  audit  trail  that is both  human  and  machine
readable,  and is readily  accessible and easily  employable by disabled voters.
Examples of our system's  disability  accommodating  functions include a special
tactile keypad to facilitate  ease of navigation for the blind,  Braille text on
the keypad,  audio ballot support in the voter's selected language,  recognition
of  non-human   touch  from  users  with   prosthetic   limbs,   and  wheelchair
accessibility.  The touch screen function is user-friendly and has been designed
to minimize potential errors. Other notable features include the ability to:

         o        support multiple  languages,  both on-screen and in audio (all
                  languages supported by Java/Unicode);

         o        alter visual schemes to better enable those with modest visual
                  impairments, such as color blindness or tunnel vision;

         o        notify  electronically  the voting  administrator of equipment
                  malfunction(s);

         o        spoil an erroneous ballot before the voter deposits his or her
                  Proof of Vote into the ballot box; the ability to provide full
                  support for provisional ballots as required by HAVA; and

         o        record write-in candidates.

         Elections   officials  also  enjoy  benefits  from  our  system  as  it
eliminates  the  need  for  costly  pre-printed  paper  ballots.   The  election
tabulation and reporting  functions greatly enhance the reliability and accuracy
of the voting process. Furthermore, the non-proprietary hardware ensures greater
inter-operability and ease of repairs or upgrades.

         We have  entered  into a contract  for the  manufacture  of our current
product which is comprised of a printer, touch screen, computer processing unit,
smart card reader,  integrated case, power supply and related control  software.
The  contract  requires  us  to  acquire  the  product   exclusively  from  this
manufacturer  unless the  manufacturer  is unable to produce and deliver on time
our required quantity. We believe that other manufacturers would be available to
manufacture  the  product  should  this  manufacturer  become  unavailable.  The
manufacturer  may change prices upon 60 days prior written  notice to us. Unless
sooner  terminated,  the agreement expires in December 2006. As of September 22,
2004, the manufacturer and its president own 766,000 shares of our common stock.
For a

                                       22
discussion of risks with respect to this arrangement, please see "Risk Factors -
Risks Relating to Our Business - We rely on a third-party manufacturer."

BUSINESS STRENGTHS

         Our key business strengths are described below:

         OUR  PRODUCT  IS A  FEDERALLY  QUALIFIED  VOTING  SYSTEM  WITH A  VOTER
VERIFIED PAPER AUDIT TRAIL THAT IS BOTH HUMAN AND MACHINE READABLE. On March 25,
2004, the AccuPoll  voting system was qualified as being compliant with the 1990
federal  voting  system  standards as to hardware,  and the 2002 federal  voting
system  standards as to software.  We believe that our  technology  is currently
unmatched  in its  capability  to  simultaneously  produce  multiple  copies  of
electronic  ballots  (recorded on both the polling  place voting  administrative
workstation and the local voting  station),  as well as generate an independent,
voter-verified  paper audit  trail,  which is  completely  auditable  and can be
optically  scanned.  We  believe  the  ability  of our system to provide a fully
auditable  paper record of the election is critical,  as HAVA  requires that any
voting system purchased with federal funds produce a permanent paper record with
a manual audit  capacity  that will be  available as an official  record for any
recount. We have submitted an updated version of our direct recording electronic
voting system to the Independent Test Authorities for full qualification testing
under the 2002  federal  voting  system  standards.  We expect to complete  full
qualification  testing under the 2002 federal voting  standards during the first
calendar quarter of 2005.

         WE ARE WELL POSITIONED TO TAKE ADVANTAGE OF THE CURRENT MARKETPLACE AND
ENVIRONMENT   OF  ELECTION   REFORM.   We  believe  that  we  have   designed  a
technologically  advanced  electronic  voting  product  that  meets the  current
federal  voting  system  standards  and the  requirements  of  HAVA,  as well as
addresses current voting systems'  technology  deficiencies.  We believe that we
are first to market in terms of  designing a voting  system that  complies  with
both the requirements of HAVA and the federal voting system standards. Achieving
voting  system  standards  compliance  can be a  lengthy  and  arduous  process,
typically taking twelve or more months, thereby posing a significant barrier for
competitors. In addition to being qualified under the federal standards, we have
spent the past two years  marketing our product to our target  customer base and
thus we believe we are well positioned to begin generating sales once the states
begin disbursing their federal funds and we have received the appropriate  state
certifications.  With the recent availability of $2.35 billion to the states, we
believe that a number of significant  purchasing decisions will be made prior to
the end of 2005.  As of June 17, 2004,  approximately  half of the federal funds
have been  distributed  to the states.  The  remaining  funds are expected to be
distributed once the states complete the necessary  requirements.  However,  the
portion of funds used by a state for  acquisition  of new  voting  systems  will
depend upon each state's plan and we cannot assure you that states will use this
funding to purchase  our product or that states will make  purchasing  decisions
this year.

         WE HAVE RELATIONSHIPS WITH WELL-KNOWN AND ESTABLISHED PARTNERS. We have
entered into teaming and reseller agreements with various established  companies
that offer  election-related  services. We have entered into a teaming agreement
with Alternative Resources Corporation whereby Alternative Resources Corporation
will provide deployment and support services for our direct recording electronic
voting  system.  In  addition,  we  have  entered  into a  multi-state  reseller
agreement  with AmCad,  LLC whereby  AmCad will  assist with the  marketing  and
deployment of our direct recording electronic voting system. We are currently in
negotiations with additional  well-known,  large and well capitalized  marketing
partners in other  targeted  states.  However,  we cannot assure you that any of
these  negotiations  will  lead to a  definitive  business  relationship  in the
future.

         OUR  EXPERIENCED  MANAGEMENT  TEAM HAS DEEP  KNOWLEDGE  OF  INFORMATION
TECHNOLOGY. Our senior management collectively has 80 years of experience in the
information  technology  industry  in  coding  and  development  marketing.  Our
management  team has held senior  positions  at leading  information  technology
firms,  such as MCI Systemhouse and EDS, and has considerable  experience in the
process of large-scale systems deployment.

BUSINESS STRATEGY

         We plan to  leverage  our  business  strengths  in  order  to grow  our
operations. The key elements to our business strategy are described below:

                                       23
LEVERAGE THE MARKETING STRENGTH AND INFRASTRUCTURE OF OUR PARTNERS.  We
believe that the  relationships  that we are  building  with our  marketing  and
reselling  partners  will help to  position us in critical  larger  markets.  We
believe that we will gain enhanced  credibility  through  associating with these
partners.  Additionally,  we believe that we have the ability to leverage  their
resources  and  networks  and in turn be better  positioned  to sell and  deploy
programs  into  these  larger  target  markets.  Our  partners  are well  known,
established companies that have considerable  experience in providing technology
solutions  and service  support in the  election  process.  We will  continue to
maintain,  and intend to expand,  our strategic  alliances  with these and other
established partners in the election services business. Currently we have chosen
to develop partnering relationships on a state-by-state basis.

         EXPAND  OUR  TARGETED,  INDEPENDENT  MARKETING  STRATEGY  TO SMALL- AND
MID-SIZED  CUSTOMERS.  We have begun a direct marketing approach to reach small-
and mid-sized target markets. We initiated this marketing program by identifying
specific  regions  and  developing  a  presence  by  attending  trade  shows and
conferences,  which provides us with  opportunities to meet, as well as educate,
our  customers.  We also  market  our  system by means of our  website  and have
prepared a web-based  virtual voting experience to further enhance the awareness
and  understanding  of our product.  We are  building  awareness of the AccuPoll
product so as to be well  positioned  in our target  markets as HAVA  funding is
disbursed to the states.  We are working to obtain all  appropriate  federal and
local certification with that timing in mind. We intend to grow our direct sales
and marketing force,  engage additional  lobbyists in our target states,  engage
local  sales/marketing  agents,  and build a robust  sales  support and delivery
organization that will reinforce our sales and marketing activities.

         MAINTAIN  PRODUCT  LEADERSHIP.  As the  developer  of the first  voting
system  with a  voter-verified  paper  audit  trail  that  is  both  human-  and
machine-readable and that is also qualified as compliant with the federal voting
system  standards,  we believe  that our product has the  potential  to become a
leader in the voting system market.  We are firmly committed to ongoing research
and development and  standardized  product testing to insure that our electronic
voting  system  continues  to be a leading  platform in the  market.  We plan to
design and test new  generations  of our  product  with the intent of  enhancing
functionality in anticipation of additional  government  requirements and market
demands (e.g., instant runoff voting).

         SELECTIVELY EXPAND INTO RELATED PRODUCT OFFERINGS. When appropriate, we
intend to  acquire  selectively  related  businesses  that  complement  our core
product  line and expand the range of  services  that we can offer our  customer
base.  As we find  opportunities  that broaden our  offerings,  we will consider
making  additional  acquisitions.  We believe it is important to complement  our
revenue  stream by  expanding  into related  products and services  where we can
leverage our knowledge and capabilities in electronic voting systems.

         EXPAND ADDRESSABLE  MARKETS VIA ENTRY INTO FOREIGN VENUES. The standard
election process is universal by nature, and as part of its core technology, the
AccuPoll direct recording  electronic voting system was designed and implemented
as a  flexible  platform  that  can be  adapted  to meet the  needs  of  various
countries.  We plan to expand our international sales effort in Europe,  Canada,
Asia/Pacific and Latin America.

REGULATORY MATTERS

         We expect that our voting systems will be sold primarily to counties in
the United States and other  governmental  jurisdictions.  In the United States,
our ability to sell our voting system products  depends on the  qualification of
each product through  independent testing for compliance with the federal voting
system standards.  In addition,  most states require  state-level  certification
before  we may  sell  our  products  to local  jurisdictions  in  those  states.
Moreover,  local  jurisdictions may require vendor  qualification and acceptance
level testing.  Because we plan to sell our products to government agencies,  we
will  be  subject  to  laws,   regulations  and  other  procedures  that  govern
procurement and contract implementation by those agencies.

         As of September 22, 2004, our direct recording electronic voting system
was certified by the states of Alabama, Arkansas, Kentucky,  Mississippi,  Ohio,
South  Dakota,  Utah and West  Virginia.  Currently,  we are in the  process  of
applying for certification in additional states.

         Obtaining the necessary qualifications and certifications and complying
with  government  procurement  requirements  can  be  time  consuming,   involve
unexpected  delays and may be costly.  We are subject to a number of significant
risks and  uncertainties  associated with government  regulation and procurement
that could  materially and

                                       24
adversely   affect  our  business.   For  a  description   of  these  risks  and
uncertainties, please see "Risk Factors - Risks Relating to Regulation."

ENVIRONMENTAL PROTECTION

         Our compliance with federal, state and local laws or regulations,  that
govern the discharge of materials  into the  environment  has not had a material
adverse effect upon our capital  expenditures,  earnings or competitive position
within our markets.

COMPETITION

         The  market  for the  manufacture  and  supply of  computerized  voting
machines is highly competitive. We anticipate that competition will intensify in
the  future.  As of January  21,  2005,  we  believe  that our  competitors,  in
alphabetical order, included:

COMPANY NAME                                          PRODUCT NAME
------------                                          ------------
Advanced   Voting   Solutions,   Inc.,  a             WINvote
private company based in Frisco, Texas

Avante International Technology,  Inc., a             VOTE-TRAKKER
private  company based in Princeton,  New
Jersey

Diebold Elections  Systems,  Inc., (DESI)             AccuVote-TS
a subsidiary of Diebold,  Inc.  based in
McKinney, Texas

Election Systems + Software  (ES+S), a                IVotronic
private company based in Omaha, Nebraska

Guardian Voting Systems,  a subsidiary of             ELECTronic 1242
Danaher   Controls   based   in   Gurnee,
Illinois

Hart InterCivic,  a private company based             eSlate
in Austin, Texas

Sequoia Voting  Systems,  a subsidiary of             AVC Edge
De  La  Rue,   plc,   based  in  Oakland,
California

Unilect  Corporation,  a private  company             Patriot
based in Dublin, California

         We believe that the  following are the primary  competitive  factors in
our market:

o        accessibility;

o        auditability;

o        brand recognition and market penetration;

o        customer support and service;

o        ease of use;

o        government qualification and certification of products;

o        price;

o        reliability of services; and

o        security.

                                       25
We believe that we compete  favorably  with  respect to these  factors.
However,  many of our competitors have significantly greater market penetration,
brand-name  recognition,  engineering and marketing  capabilities and financial,
technological and personnel  resources than we do. As a result, they may be able
to develop and expand their  customer base more  quickly,  adapt more swiftly to
new or  emerging  technologies  and  changes in  customers'  requirements,  take
advantage of acquisitions  and other business  opportunities  more readily,  and
devote greater  resources to the marketing and sale of services than we can. Our
competitor's  products may offer different features than our products that might
make their products more attractive to some voting administrators. To the extent
that  we do not  compete  successfully  with  respect  to  any  of  the  primary
competitive factors in our market, our business may be materially harmed.

RESEARCH AND DEVELOPMENT

         We  expect  that the pace of  technological  advances  in the  computer
voting  machine  industry  will  rapidly   increase.   Our  ability  to  compete
successfully  is heavily  dependent  upon our ability to ensure a continuing and
timely flow of  competitive  products and  technology  to the  marketplace.  Our
internal  product  development  efforts are focused on designing and  developing
computerized  voting machines that adhere to industry  standards and incorporate
the technologies and features that we believe are most desired by our customers.

         We believe that continued  strategic  investment in product development
is  essential  for us to become  competitive  in the  markets we serve.  Without
significant  additional financing,  we will be unable to continue development of
our products.

INTELLECTUAL PROPERTY

         We  rely  upon  trade  secrets,   technical   know-how  and  continuing
technological  innovation to develop and maintain our competitive position.  The
products  that we  design  require  a large  amount of  engineering  design  and
manufacturing  expertise.  The  majority  of these  technological  capabilities,
however,  are not protected by patents or licenses.  We rely on the expertise of
our  employees and our learned  experiences  in both design and  manufacture  of
these products.  We have taken steps to protect both our  intellectual  property
and brand name in the  marketplace.  We have applied to the United States Patent
and  Trademark  Office  for a systems  and  method  patent  with  respect to our
electronic  voting  system  that  produces an official  voter  verifiable  paper
ballot. We have also filed trademark  applications with the United States Patent
and Trademark Office to protect the Accupoll brand name and logo. We are subject
to  a  number  of  significant  risks  and  uncertainties  associated  with  our
intellectual  property that could  materially and adversely affect our business.
For a description of these risks and  uncertainties,  please see "Risk Factors -
Risks Relating to our Technology."

OUR EMPLOYEES AND CONSULTANTS

         As of January 21, 2005,  we had 13 and eight,  respectively,  full-time
employees and  consultants.  Our employees are not  represented  by a collective
bargaining organization. We believe our relationship with our employees is good.

                             DESCRIPTION OF PROPERTY

         We occupy  approximately  10,000 square feet of office space located at
15101 Red Hill Ave.  Suite # 220,  Tustin,  California.  The monthly cost of the
lease is $1.10 per square foot. Our lease expires on July 31, 2006.

                                LEGAL PROCEEDINGS

         In September  2003,  we were served with a lawsuit filed in the Supreme
Court of New York, County of New York, by Stern & Co  Communications  LLC, d/b/a
Stern + Co. Stern  alleging  that we breached a contract with them by failing to
tender payment in full for services rendered. Stern sought to recover damages in
the amount of  $35,000,  and a warrant to purchase  36,000  shares of our common
stock. In November 2003, we entered into a stipulated  settlement agreement with
Stern. In  consideration  for a full release of Stern's claims,  we issued Stern
15,000 shares of common stock and granted a warrant to purchase 15,000 shares of
common stock at an exercise  price equal to our closing  stock price on the date
of issuance.

                                       26
In October  2003,  Paul Musco,  the  ex-President  of our wholly  owned
subsidiary,  Z prompt, Inc. filed suit against us and Z prompt in Superior Court
of  California,  County  of  Orange,  California.  The claim  alleged  breach of
contract, fraud and misrepresentation  stemming from our acquisition of, and his
termination of his employment  with, Z prompt.  Mr. Musco is seeking  damages in
excess of $800,000,  plus punitive  damages.  We believe that Mr. Musco breached
his agreements  with Z prompt and we have filed a cross  complaint for breach of
contract, fraud, negligence and breach of fiduciary duty seeking $2,000,000. Mr.
Musco has since filed his own cross-complaint  against us, Dennis Vadura,  Frank
Wiebe and Craig Hewitt alleging fraud and tortious  interference  with contract.
Paul Musco has also  modified his  complaint to include  additional  damages for
alleged  losses  resulting  from his  inability  to sell his shares of  AccuPoll
Holding Corp. In addition,  Michael Shockett, a former employee,  has joined the
suit and filed a cross  complaint  against us, Z prompt,  Dennis  Vadura,  Frank
Wiebe and Craig Hewitt alleging fraud,  tortuous  interference with contract and
wrongful termination. Michael Shockett was terminated from employment with us in
April 2004 for cause.  On or about  January 25, 2005, we settled this dispute in
consideration  for our agreement to: (i) make total payments of $625,000 cash to
Mr. Musco and Mr. Shockett; and (ii) issue 1.5 million shares of common stock to
Mr. Musco and Mr.  Shockett.  In the event of default on the cash payment terms,
there will be an additional $250,000 cash amount added to the settlement amount.

         In October 2003, a former  employee of Z prompt,  Nathalie  Luu,  filed
suit against Z prompt and us in Superior Court of California,  County of Orange,
California. The complaint claims wrongful termination, intentional infliction of
emotional  distress and  retaliatory  discharge,  based on allegations  that the
plaintiff  was  terminated  for  reporting  to  management   alleged  fraudulent
accounting  practices  by Z prompt  management.  The former  employee is seeking
$112,000 in monetary damages including loss of wages, plus punitive damages. The
case is currently in discovery.

         On March 23, 2004, our wholly-owned subsidiary, Z prompt, Inc., filed a
petition for relief under Chapter 11 of the United States Bankruptcy Code in the
United States Bankruptcy Court, Central District of California.  As of September
30,  2004,  Z  prompt  had not  filed a  proposed  Plan of  Reorganization.  The
bankruptcy was dismissed on January 25, 2005 pursuant to a stipulation between Z
prompt, Inc. and the bankruptcy trustee.

                       SUPPLEMENTARY FINANCIAL INFORMATION

Selected  quarterly  financial  data  for each of the  quarters  in the two most
recent fiscal years are presented below:
QUARTER ENDED
                                            ------------------------------------------------------
                                            9/30/03        12/31/03        03/31/04       06/30/04
                                        -------------   -------------   -------------   -------------
Net Sales                               $          --   $     361,232   $     620,140   $     527,284
Gross Profit                                       --         218,729          15,568          86,562
Net Loss                                   (1,612,650)     (3,593,022)     (4,282,293)     (5,891,248)
Loss per common share                           (0.02)          (0.03)          (0.03)          (0.04)
QUARTER ENDED
                                        -------------------------------------------------------------
                                            9/30/02        12/31/02        03/31/03       06/30/03
                                        -------------   -------------   -------------   -------------
Net Sales                               $          --   $          --   $          --   $          --
Gross Profit                                       --              --              --              --
Net Loss                                     (576,324)     (1,528,888)       (999,412)     (2,743,943)
Loss per common share                           (0.01)          (0.01)          (0.01)          (0.02)
27
In June  2003,  the  Company  recorded  an  adjustment  to  capitalize  software
development  costs of  approximately  $436,000 that were previously  expensed in
earlier  fiscal 2003  quarters  relating to WTI.  The  allocation  of such costs
incurred from a related party was adjusted in the fourth quarter of fiscal 2003.
The effect of this  adjustment  on the first  three  quarters  of fiscal 2003 is
summarized below:
QUARTER ENDED
                                        ---------------------------------------------
                                            9/30/02        12/31/02        03/31/03
                                        -------------   -------------   -------------
Net loss, as previously described       $    (738,639)  $  (1,683,613)  $  (1,115,187)
Adjustment described above                    162,915         157,725         115,775
                                        -------------   -------------   -------------
Net loss, as restated                   $     576,324   $  (1,528,888)  $    (999,412)
                                        =============   =============   =============
Such  adjustments had no effect on the  basic/diluted  loss per common share for
any of the first three quarters of fiscal 2003.  See Company's  annual report on
Form  10-K/A  for the year  ended  June 30,  2004,  included  elsewhere  in this
registration statement, for more information.

                                       28
MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

GENERAL

         We are in the business of developing and marketing  computerized voting
machines and their associated  products and services for use in federal,  state,
local and private  elections.  We have developed a direct  recording  electronic
voting  system  that  provides a  voter-verified  paper audit trail that is both
human and machine readable.  Our system was qualified as meeting certain federal
voting  system  standards  on March 25, 2004 and we believe that it is currently
the only electronic voting system providing these features that is so qualified.
As of September  22, 2004,  our direct  recording  electronic  voting system was
certified by the states of Alabama, Arkansas, Kentucky, Mississippi, Ohio, South
Dakota, Utah and West Virginia. Currently, we are in the process of applying for
certification in additional states.

         For the fiscal  years ended June 30, 2004,  2003 and 2002,  we incurred
losses of $15,379,253,  $4,848,567 and $2,406,580,  respectively. As of June 30,
2004 we had an accumulated deficit of $22,634,400.

RESULTS OF OPERATIONS

COMPARISON  OF THREE  MONTHS  ENDED  SEPTEMBER  30, 2004 TO THREE  MONTHS  ENDED
SEPTEMBER 2003

         REVENUES:  Net Sales for the  quarter  ending  September  30, 2004 were
$494,244 as compared to net sales for the three months ending September 30, 2003
of $0. The  increase in net sales is solely due to the  acquisition  of Zprompt,
Inc. which was consolidated beginning November 2003.

         COST OF GOODS SOLD: Cost of goods sold for the quarter ending September
30, 2004 were $329,357,  as compared to $0 for the quarter ending  September 30,
2003.  The  increase in net sales is solely due to the  acquisition  of Zprompt,
Inc. which was consolidated beginning November 2003.

         GENERAL  AND  ADMINISTRATIVE   EXPENSES:   General  and  Administrative
expenses for the quarter ended September 30, 2004 were $1,315,155 as compared to
$915,290 for the quarter  ended  September  30,  2003,  and increase of 44%. The
increase is a result of fees  associated with our September  private  placement,
and increased salary expenses resulting from the acquisition of Zprompt Inc.

         PROFESSIONAL  FEES:  Professional  Fees for the quarter ended September
30, 2004 were  $2,191,277 as compared to $87,327 for the quarter ended September
30, 2003, an increase of 2,400%. The increase is a result of charges of expenses
associated with various warrants, which were granted to consultants.

         INTEREST EXPENSE: Interest Expenses for the quarter ended September 30,
2004 were $345,527 as compared to $610,073 for the quarter  ended  September 30,
2003, a decrease of 77%. The decrease is a result of less  expenses  incurred in
this  quarter,  compared  to  the  prior  year  period,  related  to  beneficial
conversion features of equity instruments issued at below market.

         NET  LOSS:  Net loss  for the  quarter  ended  September  30,  2004 was
$3,687,072 as compared to $1,612,690 for the quarter ended September 30, 2003, a
129% increase. The increase is primarily due to non-cash professional fees.

COMPARISON OF YEAR ENDED JUNE 30, 2004 TO YEAR ENDED JUNE 30, 2003

         REVENUES:  For  the  year  ended  June  30,  2004  we had  revenues  of
approximately $1.5 million.  For the year ended June 30, 2003 we had no revenue.
The increase was caused by our  acquisition of Z prompt,  which was recorded for
accounting purposes in November 2003.

         GENERAL  AND  ADMINISTRATIVE   EXPENSES:   General  and  administrative
expenses  were  $3,160,257  for the year  ended  June 30,  2004 as  compared  to
$3,104,192  for the year ended  June 30,  2003.  The  increase  in  general  and

                                       29
administrative expenses is the result of additional staff.

         PROFESSIONAL FEES: Professional fees were $4,264,156 for the year ended
June 30, 2004 as compared to  $1,714,475  for the year ended June 30, 2003.  The
increase in professional  fees is due to costs of services to develop the Ballot
Buddy  product  and  non-cash  expenses  related to the  issuance of warrants to
consultants.

         INTEREST  EXPENSE:  Interest  expense was $4,534,947 for the year ended
June 30,  2004 as  compared  to $29,900  for the year ended June 30,  2003.  The
increase in interest expense is due to non-cash  beneficial  conversion  charges
for equity instruments tied to fund raising.

         NET LOSS:  For the year ended June 30, 2004,  we incurred a net loss of
$15,379,253 and a loss per common share of $0.12. This compares to a net loss of
$4,848,567  and a loss per  common  share of $0.05 for the year  ended  June 30,
2003.  The  increased  loss is due to increased  professional  fees and interest
expense plus the  impairment of goodwill  totaling  $2,542,752 and a loss on the
disposal  of an  investment  totaling  $1,200,000,  as  well  as the  additional
expenses of our newly acquired subsidiary.

COMPARISON OF YEAR ENDED JUNE 30, 2003 TO YEAR ENDED JUNE 30, 2002

         REVENUES: For the years ended June 30, 2003 and 2002 we had no
revenues.

         GENERAL  AND  ADMINISTRATIVE   EXPENSES:   General  and  administrative
expenses  increased by approximately  243% to $3,104,192 for the year ended June
30, 2003 from  $904,083  for the period  ended June 30,  2002.  The  increase in
general and  administrative  expenses  is the result of  additional  staff,  and
non-cash  expenses  related to the issuance of options and warrants to employees
and consultants that are in the money.

         PROFESSIONAL FEES: Professional fees were $1,714,475 for the year ended
June 30, 2003 as compared to  $1,198,622  for the year ended June 30, 2002.  The
increase in  professional  fees by  approximately  43% was due to  increases  in
development  fees of ballot buddy  product and  increased  legal and  accounting
expenses.

         INTEREST EXPENSE:  Interest expense was $29,900 for the year ended June
30,  2003 as  compared  to  $303,875  for the  year  ended  June 30,  2002.  The
significant  decrease  in  interest  expense  was  due  to  non-cash  beneficial
conversion of investments.

         RESEARCH AND DEVELOPMENT:  Research and development expenses was $0 for
the year ended June 30, 2003 as compared to $176,064 for the year ended June 30,
2002.

         NET LOSS:  For the year ended June 30, 2003,  we incurred a net loss of
$4,848,567  and a net loss per share of $0.05.  This  compares  to a net loss of
$2,406,580 and a net loss per share of $0.04 for the year ended June 30, 2002.

LIQUIDITY AND CAPITAL RESOURCES

         From August 2001,  the date of our  inception,  through  September  30,
2004,  we have raised a total of  approximately  $19.3  million from the sale of
common stock and convertible notes and other securities.

         As of September 30, 2004 we had cash of $773,961 and a working  capital
deficiency  of  approximately  $6.2  million.  Our  accumulated  deficit  as  of
September 30, 2004 was approximately $26.3 million.

         In  November  2003,  we secured a $5 million  dollar  revolving  credit
facility,  in the form of two  seven-month  convertible  notes.  The notes  bear
interest at an annual rate of 10% and  originally  matured on June 30, 2004, but
have been extended to December 31, 2004.  The notes are  convertible  on 90 days
written  notice by the  holders  at the lesser of (i) 50% of the  average  three
lowest  closing  prices for our common  stock for the  twenty  days  immediately
preceding the conversion  date or (ii) $.0625 per share.  At September 30, 2004,
we had borrowed $2,380,000 under such notes.

         We have a convertible  debenture with Palisades  Holdings,  LLC whereby
Palisades Holdings, at its

                                       30
discretion,  may provide us loans of up to $1,250,000. The convertible debenture
bears interest at an annual rate of 10% and originally matured on June 30, 2004,
but has been extended to December 31, 2004.  The debenture is  convertible on 90
days  written  notice  by  Palisades  Holdings  at the  lesser of (i) 50% of the
average  three  lowest  closing  prices for our common stock for the twenty days
immediately preceding the conversion date or (ii) $.0625 per share. At September
30, 2004, we had borrowed $836,000 under such debenture.

         We have a convertible  debenture  with C&S  Consolidated  Services Hong
Kong.  The  convertible  debenture  bears  interest  at an annual rate of 7% and
matured on October 14, 2004. The debenture is convertible in to shares of common
stock of $0.35 per share.  At  September  30,  2004,  we had balance of $288,600
under such debenture.

         We have a convertible  debenture with four  accredited  investors.  The
convertible  debenture  accrued  interest at an annual rate of 8% and matured on
July 2, 2004. In October 2004, the debenture was converted into 3,125,000 shares
of common stock of $.15 per share.

         On September  13, 2004,  we completed a private  placement  transaction
with eleven  accredited  investors,  pursuant to which we sold an  aggregate  of
3,666,447 shares of common stock, 1,833,227 Series A Warrants,  1,833,227 Series
B  Warrants  and  1,833,227  Series  C  Warrants.  We  received  gross  proceeds
approximating  $1,650,000.  For each two  shares  of  common  stock,  we  issued
investors  one A Warrant,  one B Warrant and one C Warrant.  Each two shares and
three  warrants were sold at a total price of $0.90.  The private  placement was
exempt from registration under Rule 506 of Regulation D of the Securities Act of
1933, as amended.

         On November 4, 2004, we completed a private placement  transaction with
eleven accredited investors, pursuant to which we sold an aggregate of 6,050,000
shares of common stock, 3,025,000 Series A Warrants, 3,025,000 Series B Warrants
and 3,025,000 Series C Warrants.  We received gross proceeds totaling  $605,000.
For each two shares of common stock,  we issued  investors one A Warrant,  one B
Warrant  and one C Warrant.  Each two shares and three  warrants  were sold at a
total  price of $0.20.  The  private  placement  was  exempt  from  registration
requirements under Rule 506 of Regulation D of the Securities Act of 1933.

         We have offered and sold a substantial number of shares of common stock
and warrants and options to purchase common stock without registration under the
Securities  Act of 1933, as amended,  or  qualification  under state  securities
laws.  If any offer or sale were not exempt from,  or otherwise  not subject to,
federal and state  registration and  qualification  requirements,  the purchaser
would have a number of remedies,  including  the right to rescind the  purchase.
The Securities  Act of 1933, as amended,  requires that any claim for rescission
be brought within one year of the alleged violation.  We have sold approximately
9,768,000  shares of common stock and  warrants  and options to purchase  common
stock in the United  States  within one year of  September  30,  2004.  The time
periods  within  which  claims  for  rescission  must  be  brought  under  state
securities  laws vary and may be two years or more from the date of the  alleged
violation.  We have sold  approximately  13,995,000  shares of common  stock and
warrants  and options to purchase  shares of common  stock in the United  States
within two years of  September  30,  2004.  Further,  we cannot  assure you that
courts will not apply  equitable or other  doctrines to extend the period within
which  purchasers  may bring their  claims.  The number of warrants  and options
described  above does not  include  warrants  and options to purchase a total of
3,600,000  shares of common stock issued  within two years of September 30, 2004
to our chief executive officer, Dennis Vadura and our president,  Frank Wiebe or
a warrant to purchase 12,400,000 shares of common stock for which the holder has
agreed in writing  that it will not assert any right to  rescission  that it may
have. However, we cannot assure you that this agreement is enforceable.

CAPITAL EXPENDITURES

         We anticipate  certain capital  expenditures  related to developing and
testing  subsequent  versions of the voting  system  hardware and  software.  We
estimate such capital expenditures for hardware to be approximately $250,000 and
an  additional  $250,000 for software  over the course of the fiscal year ending
June 30,  2005.  We will be reliant on future  fund  raising in order to pay for
development and testing of these subsequent versions.

GOING CONCERN

         We have incurred losses from operations since  inception,  had negative
working  capital of  approximately  $6.2 million at September 30, 2004, and lack
operational  history.  These conditions,  among others,  raise substantial

                                       31
doubt about our ability to continue as a going concern.

         We have not generated  any revenues from our Voting System  operations,
and there is no assurance of any future  revenues.  We will require  substantial
additional  funding  for  continuing  the  development,   obtaining   regulatory
approval,  and  commercialization of our product.  There is no assurance that we
will be able to obtain  sufficient  additional  funds  when  needed or that such
funds, if available, will be obtainable on satisfactory terms.

         Management has taken actions to address these matters, which include:

         o        Retention of experienced  management personnel with particular
                  skills in the commercialization of such products;

         o        Attainment   of   technology  to  develop  such  products  and
                  additional products; and

         o        Raising  additional  funds  through  the  sale of debt  and/or
                  equity securities.

         Federal,  State and various foreign  government  regulations govern the
sale of our  products.  There  can be no  assurance  that we  will  receive  the
regulatory approval required to market our proposed products.

         The accompanying  consolidated  financial statements have been prepared
assuming  that we will continue as a going  concern  which  contemplates,  among
other things,  the realization of assets and  satisfaction of liabilities in the
ordinary  course of business.  As stated above,  we have incurred losses through
September 30, 2004,  have negative  working capital at that date and have a lack
of operational history which, among other factors, raise substantial doubt about
our ability to continue as a going concern. We intend to fund operations through
sales of the Voting  System,  but there is no commitment by any entities for the
purchase of any of the proposed  products.  In the absence of significant  sales
and profits,  we may seek to raise  additional funds to meet our working capital
requirements  through  debt and/or  equity  financing  arrangements.  Management
believes  that  such  arrangements  will  be  sufficient  to  fund  our  capital
expenditures,  working  capital needs and other cash  requirements  for the year
ending June 30, 2005.  The  successful  outcome of future  activities  cannot be
determined at this time,  and there is no assurance  that, if achieved,  we will
have sufficient funds to execute our intended business plan or generate positive
operating results.

         These  circumstances,  combined with the potential liability associated
with  certain  equity  instruments  subject  to  rescission  (see  Note 2 to the
accompanying  interim financial  statements for additional  information),  raise
substantial  doubt  about  our  ability  to  continue  as a going  concern.  The
accompanying  consolidated  financial  statements do not include any adjustments
that might result from the outcome of this uncertainty.

INFLATION

         Our management believes that inflation has not had a material effect on
our results of operations.

OFF-BALANCE SHEET ARRANGEMENTS

         We do not have any off balance sheet  arrangements  that are reasonably
likely to have a current or future effect on our financial condition,  revenues,
results of operations, liquidity or capital expenditures.

                                       32
CONTRACTUAL OBLIGATIONS

         As of September 30, 2004, we had the following contractual obligations:
Payments due by period
                                            -----------------------------------------------------------
                                                      Less than                             More than 5
Contractual Obligations                     TOTAL       1 YEAR     1-3 YEARS    3-5 YEARS      YEARS
-------------------------------------------------------------------------------------------------------
Operating Lease Obligations
     Greenberg Farrow Architecture

          - Tustin office                 $132,000                 $132,000     $     --    $       --
     Olen Lease - Irvine facility          $39,911      $39,911
     Amarillo Grant - Texas facility      $250,000     $250,000

Long-Term Debt
     Bank of America Line of Credit       $225,000     $225,000
     Notes Payable                        $191,583     $191,583

Convertible Debt                        $3,504,600   $3,504,600

Consulting Agreements
     National Strategies Inc.              $60,000      $60,000
                                        ----------   ----------    ---------    ---------   -----------
Total                                   $4,403,094   $4,271,094    $132,000     $     --    $       --
                                        ==========   ==========    =========    =========   ===========
BUSINESS TRENDS

         There are three  business  trends  evident in the market today that are
material  to our  operations.  The first is the delay in the  procurement  cycle
until  after the  November  2004  election.  This  trend was  influenced  by two
factors:  1) the delay in the  distribution  of the federal  funds by the United
States  Election  Assistance  Commission,  and 2) the  presidential  election in
November 2004. The delay in the  distribution of the federal funds was caused by
the delay in nominating  and confirming  the Election  Assistance  Commissioners
(scheduled to be completed by April 2003,  but instead was completed in December
2003),  and the delay on the part of some states in meeting all the requirements
for the funds to be released by the  Election  Assistance  Commission.  With the
delay in funding until June 2004, less than five months before the November 2004
election,  the majority of counties decided not to risk making any changes until
after the November 2004 election.

         The second business trend is the growing momentum of the voter verified
paper audit trail movement.  As of May 2004,  eighteen states (Alabama,  Alaska,
Arizona, California, Connecticut, Georgia, Illinois, Maine, Maryland, Minnesota,
New Hampshire, New Jersey, New York, Ohio, Vermont,  Virginia, West Virginia and
Wisconsin) have either passed or are actively considering legislation that would
make it a requirement for any direct recording  electronic voting system used in
the state to produce a voter verified paper audit trail.  In another five states
(California, Missouri, Oregon, New Hampshire and Nevada), the Secretary of State
has issued a  directive  mandating  a voter  verified  paper  audit trail in the
state.

         The  third  business  trend  is the  growing  list of  states  that are
requiring direct recording  electronic  voting systems to be qualified under the
2002 federal voting system  standards.  This requirement is primarily focused in
states where  electronic  voting  systems have not been  previously  used (e.g.,
Illinois, Missouri, Iowa and North Carolina).

         Overall the net impact of these  trends on us is  positive.  We already
have a direct  recording  electronic  voting system with a voter  verified paper
audit trail  qualified  under the 1990 federal voting system  standards.  We are
currently  in the  process of testing  our direct  recording  electronic  voting
system under the 2002 federal  voting  system  standards.  We expect to complete
federal  qualification testing under the 2002 federal voting system standards by
January 31, 2005. This would place us in position as one of the few vendors with
a direct recording  electronic  voting system that is federally  qualified under
the 2002 voting system  standards and has a voter  verified paper audit trail in
time  for the  beginning  of the  procurement  cycle  after  the  November  2004
election. This is especially important in states like Missouri and Illinois that
have not previously  authorized direct recording electronic voting systems to be
used in the state,  but must at a minimum  meet the  accessibility  requirements
under HAVA (i.e.,  one direct  recording  electronic  voting machine per polling
place).

                                       33
CRITICAL ACCOUNTING POLICIES

         The  preparation  of financial  statements  and related  disclosures in
conformity with accounting principles generally accepted in the United States of
America  ("GAAP")  requires  management  to  make  judgments,   assumptions  and
estimates  that  affect  the  amounts  reported  in our  consolidated  financial
statements  and the  accompanying  notes.  The amount of assets and  liabilities
reported on our balance  sheet and the amount of revenues and expenses  reported
for each of our fiscal periods are affected by estimates and assumptions,  which
are used for, but not limited to, the accounting for equity instruments  subject
to rescission,  software  development  costs,  estimated  allowance for doubtful
accounts,  the realizability of our investments in affiliated  companies and the
valuation  of  deferred  tax  assets.  Actual  results  could  differ from these
estimates. The following critical accounting policies are significantly affected
by judgments, assumptions and estimates used in the preparation of the financial
statements:

EQUITY INSTRUMENTS SUBJECT TO RESCISSION

         We account for common  stock and other equity  instruments  that may be
subject  to  rescission  claims at  estimated  fair value  (based on  applicable
measurement   criteria)  in  accordance   with  the   Securities   and  Exchange
Commission's  promulgated accounting rules and interpretive releases.  Under the
Securities  and Exchange  Commission's  interpretation  of GAAP,  reporting such
claims outside of stockholders' equity is required, regardless of how remote the
redemption event may be.

         We may be subject to possible claims for rescission with respect to the
sale or other  issuances of certain  common  stock,  options and  warrants.  The
consolidated  balance sheets included elsewhere herein reflect an adjustment for
the matter described below.

         Approximately  26.6  million  shares of our common  stock,  options and
warrants that were issued or granted in the United States  without  registration
or  qualification  under  federal or state  securities  laws during the two-year
period ended September 30, 2004 may be subject to rescission.  The fair value of
these  securities was estimated  based on a combination of (a) the selling price
of the common stock on the dates sold, (b) the price per the agreement for stock
issued  in  conversion  of debt,  (c) the fair  value of the stock  options  and
warrants on their grant dates, and (d) an independent  valuation.  Based in part
on advice of counsel, the fair value of these options and warrants was estimated
using  the  Black-Scholes  option-pricing  model.  Based  on  these  measurement
criteria,  our potential  liability directly  associated with the aforementioned
securities  transactions  is estimated to  approximate  $6.3 million  (including
interest) at September 30, 2004 plus legal fees and any fines or penalties  that
might be assessed by regulatory agencies.

         Based on advice of counsel,  the potential  liability  discussed  above
does not include  options to  purchase a total of 3.6  million  shares of common
stock issued to our president and to our chief  executive  officer because these
two individuals are also principal stockholders;  acting together, they have the
ability  to  control  us. The grant  date  estimated  fair value of the  options
described in this paragraph (excluding interest) approximates $1,360,000.

         Management  is unable to  determine  at this time whether any claim for
rescission may be filed against us; however, there can be no assurance that such
claims will not be asserted.  In addition,  regulatory  agencies  could launch a
formal investigation and/or institute an enforcement proceeding against us.

         The ultimate  outcome of the matters  discussed  above is not presently
determinable. Accordingly, management is unable to estimate the total liability,
if any, that we may incur as a result of such  contingencies.  Regardless of how
remote a rescission  event may be, GAAP as  interpreted by the SEC requires that
equity securities subject to rescission be reported outside of the stockholders'
equity section of the balance sheet until the applicable statutes of limitations
have expired.  Thus, we have reported  approximately  $6.3 million as "mezzanine
equity" in the September 30, 2004 condensed consolidated balance sheet.

         Approximately  8.5  million  shares  of  our  common  stock  issued  in
connection with the  acquisition of Z prompt,  with an  issuance-date  estimated
fair value of approximately  $1.8 million,  have been excluded from the June 30,
2003 mezzanine equity amount, as the acquisition was not recorded until November
2003  for  reasons  described  in Note 3 to the  annual  consolidated  financial
statements.

                                       34
CAPITALIZED SOFTWARE DEVELOPMENT COSTS

         In accordance with Statement of Financial Accounting Standards ("SFAS")
No. 86  "Accounting  for the Costs of  Computer  Software  to be Sold  Leased or
Otherwise  Marketed," we capitalize  certain costs related to the development of
new software  products or the enhancement of existing software products for sale
or  license.   These  costs  are  capitalized   from  the  point  in  time  that
technological feasibility has been established,  as evidenced by a working model
or  detailed  working  program  design to the point in time that the  product is
available for general release to customers.  Capitalized  development  costs are
amortized on a  straight-line  basis over the  estimated  economic  lives of the
products, beginning with the general product release to customers.  Research and
development costs incurred prior to establishing  technological  feasibility and
costs incurred subsequent to general product release to customers are charged to
expense as incurred.  We periodically  evaluate  whether events or circumstances
have occurred that indicate that the remaining  useful lives of the  capitalized
software  development  costs should be revised or that the remaining  balance of
such assets may not be recoverable.

         At September  30, 2004,  we believe that no revisions to the  remaining
useful  lives or  write-down  of  capitalized  software  development  costs  are
required.  Our systems were qualified as meeting  certain  federal voting system
standards  in late March 2004.  We began  amortizing  the  capitalized  software
development costs over a period of thirty-six months beginning April 2004.

STOCK BASED COMPENSATION

         We account for stock-based  compensation  issued to employees using the
intrinsic  value based  method as  prescribed  by  Accounting  Principles  Board
Opinion No. 25 (APB 25),  "Accounting for Stock issued to Employees."  Under the
intrinsic value based method, compensation expense is the excess, if any, of the
fair  value of the stock at the grant  date or other  measurement  date over the
amount an employee must pay to acquire the stock.  Compensation expense, if any,
is recognized over the applicable  service period,  which is usually the vesting
period.

         SFAS 123, "Accounting for Stock-Based  Compensation," if fully adopted,
changes the method of accounting for employee stock-based  compensation plans to
the fair value  based  method.  For stock  options and  warrants,  fair value is
estimated  using an option pricing model that takes into account the stock price
at the grant  date,  the  exercise  price,  the  expected  life of the option or
warrant,   stock  volatility  and  the  annual  rate  of  quarterly   dividends.
Compensation  expense, if any, is recognized over the applicable service period,
which is usually the vesting period.

         The adoption of the accounting  methodology of SFAS 123 is optional and
we have elected to continue  accounting for stock-based  compensation  issued to
employees using APB 25;  however,  pro forma  disclosures,  as if we adopted the
cost recognition  requirement under SFAS 123, are required to be presented.  For
stock-based  compensation issued to non-employees,  we use the fair value method
of accounting under the provisions of SFAS 123.

         Financial Accounting Standards Board (FASB)  Interpretation No. 44 (FIN
44),  "Accounting  for Certain  Transactions  Involving Stock  Compensation,  an
Interpretation  of APB  25"  clarifies  the  application  of APB 25 for  (a) the
definition  of employee  for  purposes of applying  APB 25, (b) the criteria for
determining  whether  a plan  qualifies  as a non  compensatory  plan,  (c)  the
accounting  consequence for various  modifications  to the terms of a previously
fixed  stock  option or award and (d) the  accounting  for an  exchange of stock
compensation  awards in a business  combination.  We believe that we account for
transactions involving stock compensation in accordance with FIN 44.

         SFAS 148,  "Accounting  for  Stock-Based  Compensation - Transition and
Disclosure,  an  amendment  of SFAS No. 123,"  provides  alternative  methods of
transition  for a voluntary  change to the fair value based method of accounting
for stock-based employee  compensation.  In addition,  this statement amends the
disclosure  requirements  of SFAS 123 to require  prominent  disclosures in both
annual and  interim  financial  statements  about the method of  accounting  for
stock-based employee  compensation and the effect of the method used on reported
results.

                                       35
FINANCIAL REPORTING RELATED TO WEB TOOLS INTERNATIONAL, INC.

         In January 2003, the FASB issued FIN No. 46, "Consolidation of Variable
Interest  Entities,  an Interpretation of ARB 51". The primary objectives of FIN
No. 46 are to provide  guidance  on the  identification  of  entities  for which
control is achieved  through means other than voting rights  (variable  interest
entities),  and how to  determine  when and  which  business  enterprise  should
consolidate  the  variable  interest  entity.  This new model for  consolidation
applies to an entity for which  either:  (a) the equity  investors do not have a
controlling  financial  interest;  or (b)  the  equity  investment  at  risk  is
insufficient to finance that entity's  activities  without receiving  additional
subordinated  financial  support from other  parties.  In  addition,  FIN No. 46
requires  that both the primary  beneficiary  and all other  enterprises  with a
significant  variable  interest in a variable  interest  entity make  additional
disclosures.  As amended in December 2003, the effective dates of FIN No. 46 for
us are as follows:  (a) for  interests in  special-purpose  entities:  the first
period ended after  December  15, 2003;  and (b) for all other types of variable
interest entities: the first period ended after March 15, 2004.

         As disclosed in the notes to our  accompanying  consolidated  financial
statements, we are associated with Web Tools International,  Inc. through common
ownership;  in  addition,  we were  virtually  Web  Tools  International's  only
customer for software  development  services in fiscal 2003.  Based on these and
other  factors,  we determined  that (1) Web Tools  International  is a variable
interest  entity and (2) we were its primary  beneficiary as of January 1, 2004.
Therefore,  effective  January 1, 2004, the accounts of Web Tools  International
were consolidated with those of AccuPoll.  For reasons explained in the notes to
our June 30, 2004 consolidated  financial statements,  the accounts of Web Tools
International were de-consolidated effective April 1, 2004.

THE CONTINUED CONSOLIDATION OF A SUBSIDIARY IN BANKRUPTCY

         As discussed in the notes to our  accompanying  consolidated  financial
statements, Z prompt (a wholly-owned subsidiary) filed bankruptcy in March 2004.
We are the single  largest  pre-petition  creditor of Z prompt.  Management  has
determined that it would not be meaningful to  de-consolidate  the accounts of Z
prompt at this time because we (a) have a substantial  negative  investment in Z
prompt  as of  September  30,  2004 and (b)  expect to  regain  control  of this
subsidiary  based on the  expectation  that Z prompt will be able to negotiate a
confirmed  reorganization plan and emerge from bankruptcy by approximately March
2005.

RECENT ACCOUNTING PRONOUNCEMENTS

         We  continue  to assess  the  effects  of  recently  issued  accounting
standards.  The impact of all recently adopted and issued  accounting  standards
has been disclosed in Note 1 of the accompanying annual  consolidated  financial
statements.

                    QUANTITATIVE AND QUALITATIVE DISCLOSURES
                                ABOUT MARKET RISK

         Changes in United  States  interest  rates  would  affect the  interest
earned on our cash and cash  equivalents.  Based on our  overall  interest  rate
exposure at September 30, 2004, a near-term  change in interest rates,  based on
historical  movements,  would not  materially  affect the fair value of interest
rate sensitive  instruments.  Our debt instruments have fixed interest rates and
terms and,  therefore,  a significant  change in interest rates would not have a
material adverse effect on our financial position or results of operations.

                                       36
MANAGEMENT

DIRECTORS AND OFFICERS

         Our current directors and executive officers are as follows:

NAME (1) (2)         AGE   POSITION
----                 ---   --------
Dennis Vadura        43    Chief Executive Officer and Director
Frank J. Wiebe       44    President, Secretary, Treasurer and Director
Craig A. Hewitt      37    Chief Financial Officer
Chester Noblett Jr.  60    Executive Vice President, Sales
Jo-Ann Zakielarz     52    Vice President, Government Affairs/Global Alliances
Andrea M. Porcelli   36    Director
Phil Trubey          41    Director

(1)      We do not have a separately designated executive committee,  nominating
         committee or audit committee of the Board of Directors.

(2)      Our executive  officers hold office until their  successors are elected
         and qualified, or until their death, resignation or removal.

         The background and principal occupations of each director and executive
officer are as follows:

         Mr. Vadura became a director and our Chief Executive Officer on May 20,
2002. From April 2000 to the present, he has been the Chief Executive Officer of
Web Tools  International,  Inc. From April 1999 to April 2000,  Mr. Vadura was a
senior technical  architect  employed by Electronic Data Systems  ("EDS").  From
1996 to April  1999,  he was  employed by  companies  acquired by EDS in similar
positions.

         Mr. Wiebe became a director and our President,  Secretary and Treasurer
on May 20, 2002. From May 2000 to the present, he has been the Vice President of
Web Tools  International,  Inc. From November 1992 to the present, he has been a
Strategic Program Manager with EDS E.solutions business unit. He previously held
various positions with the Gemini Group.

         Mr. Hewitt became our Chief  Financial  Officer in May 2002. Mr. Hewitt
also  owns and  operates  Hewitt &  Associates,  Inc.,  a  financial  consulting
company.  From August 2000 to September 2001, he was the Chief Financial Officer
of Junum Incorporated,  a public company engaged in credit and finance services.
From   August   1998  to  August   2000,   Mr.   Hewitt   was  Chief   Financial
Officer/Controller for Universal Broadband Networks, a public company engaged in
telecommunications.

         Mr.  Noblett  has been Vice  President  of Sales since July 2002 and is
responsible for our sales organization.  He was Chief Executive Officer for eSAT
from June 1999 until  December  2001.  From  January1997  to February  1998, Mr.
Noblett  served as interim  Chief  Financial  Officer  of eSAT and  subsequently
served as Chief Operating Officer as eSAT until June 1999.

         Ms.  Zakielarz was hired as Vice President of Government  Relations and
Global  Alliances in January 2003.  Ms.  Zakielarz was with Unisys Corp.  for 13
years where she developed,  promoted and  implemented  technology  solutions for
state and local  election  officials.  Her  experience  ranged from  selling and
consulting   on   the    implementation    of   precinct   voting   systems   to
statewide-centralized voter registration systems.

         Ms. Andreea M. Porcelli  became a director on May 20, 2002. From August
2, 2002 to the present Ms.  Porcelli  has been an  independent  consultant  with
Continental  Advisors S.A.  (U.K.).  From October 2000 to August 2002, she was a
registered representative of Schneider Securities, Inc. From May 2000 to October
2000, she was a registered  representative of Berry-Shino Securities,  Inc. From
March 1999 to May 2000, Ms. Porcelli was a registered  representative of Paulson
Investment Company, Inc.

         Mr. Phil Trubey was  appointed  to our Board of Directors on August 27,
2004.  Mr.  Trubey  was  the  CEO  of   Merchandising   Avenue,   an  e-commerce
infrastructure  startup  from 1999 to 2001.  In 1994,  Mr.  Trubey  founded  and

                                       37
operated Websense, Inc., an enterprise software company, until 1999.

FAMILY RELATIONSHIPS

         There  are no family  relationships  between  or among  our  directors,
executive  officers or persons nominated or charged by us to become directors or
executive officers.

INVOLVEMENT IN LEGAL PROCEEDINGS

                  In December 2003, Paul Musco,  the  ex-President of our wholly
owned subsidiary,  Z prompt, Inc. filed suit against us and Z prompt in Superior
Court of California,  County of Orange,  California. The claim alleged breach of
contract, fraud and misrepresentation  stemming from our acquisition of, and his
termination of his employment  with, Z prompt.  Mr. Musco is seeking  damages in
excess of $800,000,  plus punitive  damages.  We believe that Mr. Musco breached
his  agreements  with Z prompt  and have filed a cross  complaint  for breach of
contract, fraud, negligence and breach of fiduciary duty seeking $2,000,000. Mr.
Musco has since filed his own cross-complaint  against us, Dennis Vadura,  Frank
Wiebe and Craig Hewitt alleging fraud and tortious  interference  with contract.
In addition,  Michael  Shockett has joined the suit and filed a cross  complaint
against  us, Z prompt,  Dennis  Vadura,  Frank Wiebe and Craig  Hewitt  alleging
fraud,  tortious  interference with contract and wrongful  termination.  Michael
Shockett  was  terminated  from  employment  with us in April  2004  for  cause.
Although no assurance  can be given that we will prevail on the merits,  we will
vigorously defend these allegations.

                  In October 2003, a former employee of Z prompt,  Nathalie Luu,
filed suit against us and Z prompt in Superior  Court of  California,  County of
Orange,  California.  The complaint  claims  wrongful  termination,  intentional
infliction of emotional distress and retaliatory discharge, based on allegations
that the plaintiff was terminated for reporting to management alleged fraudulent
accounting  practices  by Z prompt  management.  The former  employee is seeking
$112,000 in monetary  damages  including loss of wages,  plus punitive  damages.
This suit is currently in  negotiations to be settled for $100,000 to be paid by
the issuance by us of common stock.  A settlement  would release us and Z prompt
from liability in connection with the suit.

         On March 23, 2004, our wholly-owned subsidiary, Z prompt, Inc., filed a
petition for relief under Chapter 11 of the United States Bankruptcy Code in the
United States Bankruptcy Court,  Central District of California.  Z prompt,  and
its  bankruptcy  counsel are in the process of preparing a disclosure  statement
and proposed plan of  re-organization.  Mr. Vadura and Mr. Wiebe who are our CEO
and  President,  respectively,  are also  directors  of Z prompt,  and held such
positions at the time of the bankruptcy  filing. Mr. Vadura is also the Chairman
of Zprompt,  and Mr. Wiebe is a Director of Z prompt.  Mr. Hewitt,  our CFO, was
formerly a member of Z prompt's Board of Directors,  but resigned from the Board
of Z prompt prior to the bankruptcy filing

         Based  solely in reliance on  representations  made by our officers and
directors,  during the past five  years,  none of the  following  occurred  with
respect to such persons:  (1) no petition under the Federal  bankruptcy  laws or
any state insolvency law was filed by or against, or a receiver, fiscal agent or
similar  officer was  appointed  by a court for the business or property of such
persons;  (2) other than the Z prompt bankruptcy described above, there has been
no petition under the Federal  bankruptcy laws or any state insolvency law filed
by or against,  or a receiver,  fiscal agent or similar  officer  appointed by a
court for the business or property of any partnership in which such persons were
a general partner at or within two years before the time of such filing,  or any
corporation  or  business  association  of which  such  persons  were  executive
officers  at or within  two years  before the time of such  filing;  (3) no such
persons were  convicted  in a criminal  proceeding  or are a named  subject of a
pending  criminal  proceeding  (excluding  traffic  violations  and other  minor
offenses);  (4) no such  persons  were the  subject  of any order,  judgment  or
decree,  not subsequently  reversed,  suspended or vacated,  of any court of any
competent   jurisdiction,   permanently  or  temporarily   enjoining,   barring,
suspending  or  otherwise  limiting  their  involvement  in any type of business
practice, or in securities or banking or other financial institution activities;
and (5) no such  persons were found by a court of  competent  jurisdiction  in a
civil action by the SEC or by the Commodity  Futures Trading  Commission to have
violated any Federal or state  securities or  commodities  law, and the judgment
has not been reversed, suspended or vacated.

                                       38
EXECUTIVE COMPENSATION

         The  following  table  sets  forth  information  concerning  the  total
compensation  that we have  paid or that has  accrued  on  behalf  of our  chief
executive  officer  and  other  executive  officers  with  annual   compensation
exceeding  $100,000  (collectively,  the "named executive  officers") during the
fiscal years ending June 30, 2004, 2003 and 2002.

                           SUMMARY COMPENSATION TABLE
LONG-TERM
                                                                                              COMPENSATION
                                                                                -----------------------------------------
                                                  ANNUAL COMPENSATION                     AWARDS             PAYOUTS
                                          -------------------------------------------------------------------------------
                                                                     OTHER                      SECURITIES                   ALL
                                                                     ANNUAL      RESTRICTED     UNDER-LYING                 OTHER
             NAME AND                                               COMPEN-         STOCK        OPTIONS/       LTIP       COMPEN-
        PRINCIPAL POSITION       YEAR   Salary ($)   BONUS ($)     SATION ($)    AWARD(S) ($)    SARS (#)    PAYOUTS ($)  SATION ($)
------------------------------------------------------------------------------------------------------------------------------------
Frank Wiebe,                     2004    $126,500       -0-           -0-           -0-                 0       -0-          -0-
     President                   2003    $115,000       -0-           -0-           -0-         1,200,000       -0-          -0-
                                 2002    $ 28,750       -0-           -0-           -0-         2,016,000       -0-          -0-
Dennis Vadura,                   2004    $126,500       -0-           -0-           -0-                 0       -0-          -0-
     Chief Executive Officer     2003    $115,000       -0-           -0-           -0-         2,400,000       -0-          -0-
                                 2002    $ 28,750       -0-           -0-           -0-         4,032,000       -0-          -0-
- Personal  benefits  received by the named executive  officers are valued below
the levels which would otherwise require  disclosure under the rules of the U.S.
Securities and Exchange Commission.

- We do not currently  provide any contingent or deferred forms of  compensation
arrangements,  annuities,  pension  or  retirement  benefits  to our  directors,
officers or employees.

- We have employment agreements with Dennis Vadura and Frank J. Wiebe.

OPTIONS GRANTS

         We made no grants of stock  options  during  fiscal year ended June 30,
2004 to any of the named executive officers.

               AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND
                          FISCAL YEAR-END OPTION VALUES

         The following  table  provides  information  concerning  the number and
value of stock options exercised during the fiscal year ended June 30, 2004, and
held at the end of such fiscal year, by the named executive officers.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES

         (A)                   (B)                 (C)                   (D)                     (E)
                                                                NUMBER OF SECURITIES
                                                                UNDERLYING              VALUE OF UNEXERCISED
                                                                UNEXERCISED             IN-THE-MONEY
                                                                OPTIONS/SARS AT JUNE    OPTIONS/SARS AT JUNE
                                                                30, 2004 (#)            30, 2004 ($)
                        SHARES ACQUIRED                         EXERCISABLE/            EXERCISABLE/
         NAME           ON EXERCISE (#)     VALUE REALIZED ($)  UNEXERCISABLE           UNEXERCISABLE
------------------------------------------------------------------------------------------------------------
Frank Wiebe                    0                  N/A             2,300,000/916,000      $974,500/$423,020
Dennis Vadura                  0                  N/A           4,600,000/1,832,000    $1,949,000/$846,040
39
EXECUTIVE EMPLOYMENT AGREEMENTS

         On May 20, 2002,  we entered  into  employment  agreements  with Dennis
Vadura, our Chief Executive Officer,  and Frank Wiebe, our President,  Secretary
and Treasurer.  Each employment agreement has a three-year term and provides for
an annual base salary of $115,000, with a minimum annual 10% increase (beginning
in fiscal 2004) as  determined by our board of directors.  The  agreements  also
provide that  Messrs.  Vadura and Wiebe will be entitled to  participate  in our
management  stock  incentive  plan  as  soon as  reasonably  practicable.  Bonus
compensation,  if any,  is to be  determined  by the Board of  Directors  or the
Compensation  Committee  of the Board of  Directors,  but cannot  exceed 100% of
their then applicable annual salary. Under the agreements,  if either Mr. Vadura
or Mr. Wiebe voluntarily  resign or are terminated with cause (as defined in the
agreements),  he will only be entitled to receive his  compensation  through the
date of  termination.  If either  Mr.  Vadura's  or Mr.  Wiebe's  employment  is
terminated by either  officer for good reason (as defined in the  agreements) or
by us without cause, he will be entitled to a lump-sum  severance  payment in an
amount  equal to his then  current  annual  salary  and we will be  required  to
provide all of his benefits for a twelve month  period.  If either Mr. Vadura or
Mr.  Wiebe is  permanently  disabled,  we will pay him his then  current  annual
salary and provide all benefits through the remainder of the calendar year and a
three-month period  thereafter.  If either Mr. Vadura or Mr. Wiebe dies, we will
pay his then current  annual  salary  through the  calendar  month in which such
death occurs.

         On May 29, 2004,  we renewed the  agreement  with Hewitt &  Associates,
Inc.  which  provides for the services of Craig Hewitt as our  consultant  Chief
Financial Officer. This agreement provides for compensation of $7,500 per month.
This agreement expires on May 29, 2005.

BENEFIT PLANS

         We do not have any pension plan,  profit sharing plan, or similar plans
for the  benefit  of our  officers,  directors  or  employees.  However,  we may
establish such plans in the future.

BOARD COMPENSATION

         We do not have any formal or informal  arrangements  or  agreements  to
compensate  our  directors  for services they provide as members of our Board of
Directors.

                                PERFORMANCE GRAPH

         The  following  performance  graph  assumes  an  investment  of $100 on
6/30/2002  and compares the change to June 30, 2004, in the market prices of our
common  stock  with the  change a broad  market  index (S & P 500 - U.S.) and an
Special  Composite  Index comprised of the following  Companies:  GPTX, NCR, and
TRMM. We have paid no dividends.  The  performance  of the indices is shown on a
total return (dividend  reinvestment)  basis. The graph lines merely connect the
prices on the dates  indicated  and do not reflect  fluctuations  between  those
dates.

                  6/30/2000   6/30/2001    6/30/2002     6/30/2003    6/30/2004
                  -------------------------------------------------------------
ACUP                   n/a        n/a       $ 100.00      $ 79.17     $  84.39
S&P 500                n/a        n/a       $ 100.00      $ 98.44     $ 115.25
Special Composite*     n/a        n/a       $ 100.00      $ 79.86     $ 164.02

*  Includes  the  following  three  companies:  GPTX,  $5.95/share  at  6/30/02,
$4.39/share  at 6/30/03,  and  $3.70/share  at  6/30/04;  NCR,  $34.60/share  at
6/30/02,  $26.76/share  at  6/30/03,  and  $49.59/share  at  6/30/04;  and TRMM,
$85/share at 6/30/02, $1.85/share at 6/30/03, and $14.49/share at 6/30/04.

                                       40
[LINE CHART OMITTED]

         SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following table sets forth certain  information,  as of January 31,
2005 with respect to the beneficial ownership of the outstanding common stock by
(i) any holder of more than five (5%)  percent;  (ii) each of our  directors and
named executive  officers;  and (iii) our directors and named executive officers
as a group. Except as otherwise indicated, each of the stockholders listed below
has sole voting and investment power over the shares beneficially owned.
Percentage of         Percentage of
                                                                                        Common Stock          Common Stock
                                                                Common Stock          Ownership Before      Ownership After
Name of Beneficial Owner (1)                               Beneficially Owned (2)       Offering (2)          Offering (3)
-------------------------------------------------------------------------------------------------------------------------------
Dennis Vadura (4) (5) (6)                                        55,718,560                23.9%                 17.9%
Frank Wiebe (4) (5) (7)                                          43,463,040                18.9%                 14.1%
Andrea M. Porcelli                                                        0                  *                     *
Phil Trubey (8)                                                  17,464,220                 7.4%                  5.6%
Hyde Investments Ltd. (9)                                        41,120,000                15.3%                 11.9%
Livingston Investments Ltd. (10)                                 38,080,000                14.4%                 11.1%
Palisades Holdings LLC (11)                                      33,440,000                12.8%                  9.9%
-------------------------------------------------------------------------------------------------------------------------------
All officers and directors as a group (4 persons)               116,645,820                 47.6%                 36.2%
* Less than 1%.

(1)      Except as otherwise indicated,  the address of each beneficial owner is
         c/o AccuPoll Holding Corp., 15101 Red Hill Ave. Suite # 220, Tustin, Ca
         92780.

(2)      Applicable  percentage  ownership  is based on  226,969,412  shares  of
         common  stock  outstanding  as  of  January  31,  2005,  together  with
         securities  exercisable  or  convertible  into  shares of common  stock
         within 60  days of January 31,  2005 for each  stockholder.  Beneficial
         ownership is determined in

                                       41
accordance with the rules of the Securities and Exchange Commission and
         generally   includes  voting  or  investment   power  with  respect  to
         securities.  Securities  that are currently  exercisable or exercisable
         within 60 days of January 31, 2005 are deemed to be beneficially  owned
         by the person holding such  securities for the purpose of computing the
         percentage  of  ownership  of  such  person,  but are  not  treated  as
         outstanding  for the purpose of computing the  percentage  ownership of
         any other person.

(3)      Based on 305,064,705 shares outstanding.

(4)      Includes   3,064,000   shares  of  common   stock  held  by  Web  Tools
         International,  Inc., a company owned and controlled by Messrs.  Vadura
         and Mr. Wiebe.

(5)      Includes  18,400,000 shares of common stock as to which Messrs.  Vadura
         and Wiebe have shared  voting  power  pursuant to  irrevocable  proxies
         granted by  stockholders.  Messrs.  Vadura  and Wiebe have no  economic
         interest in such stock.

(6)      Includes an option to purchase 2,100,000 shares at an exercise price of
         $.91 per  share  which  expires  on June 18,  2013;  and an  option  to
         purchase  3,808,000  shares at an  exercise  price of $.3125  per share
         which expires on May 29, 2012

(7)      Includes an option to purchase 1,050,000 shares at an exercise price of
         $.91 per  share  which  expires  on June 18,  2013;  and an  option  to
         purchase  1,904,000  shares at an  exercise  price of $.3125  per share
         which expires on May 29, 2012.

(8)      Includes   9,057,970  shares  of  common  stock   underlying   warrants
         exercisable at $1.55 per share.

(9)      Assumes  conversion of $1,028,000 debt (due December 31, 2004) at $.025
         per share into 41,120,000 shares.

(10)     Assumes  conversion  of $952,000  debt (due December 31, 2004) at $.025
         per share into 38,080,000 shares.

(11)     Assumes  conversion  of $836,000  debt (due December 31, 2004) at $.025
         per share into 33,440,000 shares.

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

         The  following  table  shows  information  with  respect to each equity
compensation  plan under which our common stock is authorized for issuance as of
the fiscal year ended June 30, 2004.
PLAN CATEGORY              NUMBER OF SECURITIES       WEIGHTED AVERAGE        NUMBER OF SECURITIES
                                        TO BE ISSUED UPON       EXERCISE PRICE OF      REMAINING AVAILABLE FOR
                                           EXERCISE OF         OUTSTANDING OPTIONS,     FUTURE ISSUANCE UNDER
                                      OUTSTANDING OPTIONS,     WARRANTS AND RIGHTS    EQUITY COMPENSATION PLANS
                                       WARRANTS AND RIGHTS                              (EXCLUDING SECURITIES
                                                                                       REFLECTED IN COLUMN (A)
-----------------------------------------------------------------------------------------------------------------
(A)                      (B)                       (C)
-----------------------------------------------------------------------------------------------------------------
EQUITY COMPENSATION PLANS APPROVED
BY SECURITY HOLDERS                         -0-                      -0-                       N/A
-----------------------------------------------------------------------------------------------------------------
EQUITY COMPENSATION PLANS NOT
APPROVED BY SECURITY HOLDERS             75,699,913                 $0.44                    7,765,829
-----------------------------------------------------------------------------------------------------------------
TOTAL                                    75,699,913                 $0.44                    7,765,829
-----------------------------------------------------------------------------------------------------------------
NOTES                                (1) (2) (3) (4) (5)                                        (6)
-----------------------------------------------------------------------------------------------------------------
(1)      Included in the total are  16,954,492  warrants  issued  with  exercise
         prices between $.06 and $1.55 per share from inception through June 30,
         2004, in connection  with debt  instruments,  minus  2,000,000 of these
         warrants  exercised  into shares of common stock at a price of $.50 per
         share.

(2)      Included in the total are  63,573,214  warrants  issued  with  exercise
         prices between $.06 and $1.55 per share from inception through June 30,
         2004, in connection with equity instruments,  minus 25,649,020 of these

                                       42
warrants  exercised  into shares of common stock at prices between $.06
         and $.35 per share.

(3)      Included  in the total are  4,553,551  warrants  issued  with  exercise
         prices between $.06 and $.75 per share from inception  through June 30,
         2004,  for  placement  agent  fees,  minus  631,000  of these  warrants
         exercised  into shares of common stock at prices  between $.06 and $.75
         per share.

(4)      Included  in the total are  7,552,336  warrants  issued  with  exercise
         prices between $.06 and $1.54 per share from inception through June 30,
         2004,  for  services  rendered,   minus  1,153,660  of  these  warrants
         exercised  into shares of common stock at prices  between $.08 and $.75
         per share.

(5)      Included in the total are  13,050,000  options  issued to employees and
         consultants  with exercise prices between $.31 and $1.54 per share from
         inception through June 30, 2004, for employment services, minus 550,000
         of these  options  exercised  into  shares  of  common  stock at prices
         between $.31 and $.75 per share.  Such  options were granted  under the
         Plan described in Note 6 below.

(6)      We have a 2002  Consultant  Compensation  Plan which  authorizes  us to
         grant  non-qualified  stock options with or without stock  appreciation
         rights  (SAR's)  and  stock  bonuses  to  our  consultants.  There  are
         12,000,000  shares of common stock  available for grant to participants
         under the plan. Our board of directors  determined to adopt the plan to
         retain  and  compensate   employees  and  consultants  and  to  provide
         additional incentives for employees and consultants. Shares involved in
         the  unexercised  portion of any terminated or expired option may again
         be available for grant, provided that to the extent any option in whole
         or in part is  surrendered  as the result of the exercise of a SAR, the
         shares subject to the surrendered  portion of the option will no longer
         be available for use under the plan.  The exercise  price of any option
         issued under the plan may not be less than 85% of the fair market value
         of the shares on the date of grant.

                 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

MASTER SERVICES AGREEMENT

         In April 2002, we entered into a Master Services  Agreement whereby Web
Tools  International,  Inc.  (WTI)  provided  substantially  all  non-production
services related to the manufacture of our voting system. Under the agreement we
were  charged  hourly rates for WTI's  employees  who worked on  developing  the
computer  software for the Company's Voting System.  In addition,  we reimbursed
WTI for all  reimbursable  expenses,  as defined in the  agreement.  We were not
charged for the use of the office  space or fixed  assets of WTI.  All  overhead
related  charges were  included in the basic hourly rates  charged to us by WTI.
The  agreement  expired  on March 31,  2004.  All ideas,  inventions,  concepts,
know-how,   methods,   methodologies,    processes,   algorithms,    techniques,
compilations,  software and other works of authorship  of any nature  created or
developed  by WTI during  the course of  performance  of the  agreement  are our
exclusive property.  WTI is owned and operated by Dennis Vadura and Frank Wiebe.
Mr. Vadura is our Chief Executive Officer, a director and stockholder. Mr. Wiebe
is our President, Treasurer, Secretary, a director and a stockholder. During the
fiscal year ended June 30, 2004,  WTI invoiced  approximately  $1,450,000  to us
under the terms of the agreement, of which approximately $1,487,000 remained due
and payable as of June 30, 2004.

         From January 2002 to June 30, 2004,  Andrea  Porcelli,  a member of our
board of directors, has assisted us in the placement of our securities offerings
in Europe.  These offerings were excluded from registration under the Securities
Act pursuant to Regulation S. As compensation  for these services,  Ms. Porcelli
was  entitled to receive  $528,000 in cash and warrants to purchase an aggregate
of 1,501,752  shares of our common stock at exercise  prices ranging from $.1224
to $.75 per share. Ms. Porcelli has directed us to pay all cash compensation and
issue all warrants to Montacino Ltd,  Southampton Ltd and  Continental  Advisors
S.A. Ms. Porcelli has advised us that she is not a beneficial owner or affiliate
of any of these entities.

                                       43
COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES

         Our Bylaws  authorize us to indemnify  any person who was or is a party
or is threatened  to be made a party to any  threatened,  pending,  or completed
action,  or suit by reason  of the fact  that he or she is or was our  director,
officer,  employee, or agent, or is or was serving at our request as a director,
officer, employee, or agent of another corporation,  partnership, joint venture,
trust  or  other  enterprise,  against  expenses  (including  attorneys'  fees),
judgments,  fines,  and  amounts  paid in  settlement  actually  and  reasonably
incurred by him or her in connection  with any such action,  suit or proceeding,
if he or she acted in good faith and in a manner he or she  reasonably  believed
to be in or not opposed to our best interests, and, with respect to any criminal
action or proceeding,  had no reasonable cause to believe his or her conduct was
unlawful. The termination of any action, suit, or proceeding by judgment, order,
settlement,  conviction,  or upon a plea of nolo  contendre  or its  equivalent,
shall not, of itself,  create a presumption  that the person did not act in good
faith  and in a  manner  which  he or she  reasonably  believed  to be in or not
opposed  to our best  interests,  and with  respect  to any  criminal  action or
proceeding,  he or she had  reasonable  cause to believe that his or her conduct
was unlawful.  No indemnification may be made in respect of any claim, issue, or
matter as to which such a person has been  adjudged to be liable for  negligence
or  misconduct in the  performance  of his or her duty to us, unless and only to
the extent that the court in which the action or suit was brought  determines on
application  that,  despite the  adjudication  of  liability  but in view of all
circumstances  of the case,  the person is fairly  and  reasonably  entitled  to
indemnity for such expenses as the court deems proper.

         To the extent that a  director,  officer,  employee,  or agent has been
successful  on the  merits  or  otherwise  in  defense  of any  action,  suit or
proceeding,  or in defense of any claim,  issue,  or matter  therein,  he or she
shall be indemnified against expenses  (including  attorneys' fees) actually and
reasonably  incurred  by  him  or  her  in  connection   therewith.   Any  other
indemnification  shall be made upon a determination that  indemnification of the
officer, director,  employee, or agent is proper in the circumstances because he
or she has met the applicable  standard of conduct set forth in our Bylaws. Such
determination  shall be made either: (i) by our Board of Directors by a majority
of a quorum consisting of directors who were not parties to such action, suit or
proceeding;  (ii) by independent legal counsel on a written opinion; or (iii) by
our  shareholders  by a majority vote of a quorum of shareholders at any meeting
duly called for such purpose.

         By its terms, the  indemnification  provided by our Bylaws shall not be
deemed exclusive of any other indemnification granted under any provision of any
statute,  in our Articles of Incorporation,  in our Bylaws,  agreement,  vote of
shareholders or  disinterested  directors,  or otherwise,  both as to his or her
official  capacity  and as to action in  another  capacity  while  holding  such
office,  and shall  continue  as to a person  who has  ceased to be a  director,
officer,  employee,  or agent,  and shall  inure to the benefit of the heirs and
legal representatives of such a person.

         We are authorized by our Bylaws to pay expenses incurred of a director,
officer,  employee or agent in  defending a civil or  criminal  action,  suit or
proceeding  in  advance  of the  final  disposition  of such  action,  suit,  or
proceeding  upon a majority  vote of a quorum of our Board of Directors and upon
receipt of an undertaking by or on behalf of the director,  officer, employee or
agent to repay such amount or amounts unless it is ultimately determined that he
or she is to be indemnified by us.

         Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the  "Act" or  "Securities  Act") may be  permitted  to  directors,
officers or persons  controlling  us pursuant to the  foregoing  provisions,  or
otherwise,  we have been  advised  that in the  opinion  of the  Securities  and
Exchange Commission,  such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable.

                                  LEGAL MATTERS

         The validity of the shares of common stock being offered hereby will be
passed upon for us by Sichenzia Ross Friedman Ference LLP, New York, New York.

                                       44
EXPERTS

         Our  financial  statements  as of and for the years ended June 30, 2004
and 2003, and the related consolidated  statements of operations,  stockholders'
deficit and cash flows for the period from  August 9, 2001  (Inception)  through
June 30, 2002 and for the years  ended June 30, 2004 and 2003,  included in this
prospectus,  have  been  audited  by Squar,  Milner,  Reehl &  Williamson,  LLP,
independent  registered public accountants,  as stated in their report appearing
herein and are so included herein in reliance upon the report of such firm given
upon their authority as experts in accounting and auditing.

                       WHERE YOU CAN FIND MORE INFORMATION

         We have filed with the SEC a  registration  statement on Form S-1 under
the Securities Act for the common shares sold in this offering.  This prospectus
constitutes a part of that  registration  statement.  This  prospectus  does not
contain all of the information set forth in the  registration  statement and the
regulations  of the SEC.  Accordingly,  you should  reference  the  registration
statement  and its exhibits for further  information  with respect to us and our
common shares being sold in this offering.  Copies of the registration statement
and its exhibits are on file at the offices of the SEC and on its web site.

         You may  read  and  copy  the  registration  statement,  including  the
attached exhibits, and any report,  statements or other information that we file
at the SEC's public reference  facilities located in Room 1024, Judiciary Plaza,
450 Fifth Street,  N.W.,  Washington D.C. 20549 and also at the regional offices
of Madison Street, Suite 1400, Chicago, Illinois 60661-2511. Please call the SEC
at  1-800-SEC-0330  for  further  information  on the  operation  of its  public
reference  facilities.  Our SEC  filings are also  available  to the public from
commercial   document   retrieval   services  and  at  the  SEC's  web  site  at
HTTP://WWW.SEC.GOV.

         If you are a shareholder,  you may request a copy of these filings,  at
no cost, by writing or telephoning us at the following  address:  15101 Red Hill
Ave., Ste 220, Tustin, CA 92780, phone number (949) 200-4000.

         For further  information  about us and our common  shares being sold in
this offering,  we refer you to the registration  statement and the accompanying
exhibits.  Statements contained in this prospectus concerning any document filed
as an exhibit are not necessarily  complete and we refer you to the copy of such
document filed as an exhibit to the registration statement.

                                       45
ACCUPOLL HOLDING CORP.
                          INDEX TO FINANCIAL STATEMENTS

                                                                            Page
                                                                            ----
THREE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003

Unaudited Condensed Consolidated Balance Sheets at
September 30, 2004 (unaudited) and June 30, 2004.............................F-2

Unaudited Condensed Consolidated Statements of Operations for the three
month periods ended September 30, 2004 and 2003..............................F-3

Unaudited Condensed Consolidated Statements of Cash Flows for the three
month periods ended September 30, 2004 and 2003..............................F-4

Notes to Condensed Consolidated Financial Statements.........................F-5

YEARS ENDED JUNE 30, 2004, 2003 AND SINCE INCEPTION

Report of Independent Registered Public Accounting Firm.....................F-16

Consolidated balance sheets at June 30, 2004 and 2003.......................F-17

Consolidated statements of operations for the years ended
June 30, 2004 and 2003 and for the period from August 9, 2001
(Inception) through June 30, 2002...........................................F-18

Consolidated statements of stockholders' deficit for the years
ended June 30, 2004 and 2003 and for the period from August 9, 2001
(Inception) through June 30, 2002...........................................F-19

Consolidated statements of cash flows for the years ended
June 30, 2004 and 2003 and for the period from August 9, 2001
(Inception) through June 30, 2002...........................................F-22

Notes to Consolidated Financial Statements..................................F-23

                                      F-1
ACCUPOLL HOLDING CORP. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
                                                                                  (Unaudited)
                                                                                September 30, 2004      June 30, 2004
                                                                                ------------------     ---------------
CURRENT ASSETS
Cash                                                                        $    773,961           $    113,789
      Accounts receivable, net                                                         303,895                254,895
      Inventories                                                                      375,548                168,636
                                                                                  ------------           ------------
TOTAL CURRENT ASSETS                                                                 1,453,404                537,320

      Property and equipment, net                                                       14,174                 14,012
      Capitalized software development costs                                         1,855,532              2,544,207
      Other assets                                                                      26,765                 26,246
                                                                                  ------------           ------------

      TOTAL ASSETS                                                                $  3,349,875           $  3,121,785
                                                                                  ============           ============

                            LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
      Accounts payable and accrued expenses                                       $  1,693,461           $  1,817,284
      Related party payables                                                         1,214,070              1,228,070
      Unearned revenue                                                                  35,387                 74,628
      Convertible debt, net of discount                                              3,817,100              3,304,600
      Notes payable to related parties                                                  20,000                 30,000
      Put liability related to warrant issuance                                        163,760                163,760
      Liabilities subject to compromise                                                732,470                732,544
                                                                                  ------------           ------------

TOTAL CURRENT LIABILITIES                                                            7,676,248              7,350,886
                                                                                  ------------           ------------
       Equity instruments subject to rescission                                      6,300,000              6,200,000

                                                                                  ------------           ------------
COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' DEFICIT

      Convertible  Series A  preferred  stock,  $0.01 par value,
        80,000  shares authorized, zero shares issued or outstanding
       (liquidation preference of zero)
      Common stock, par value of $0.001, 600,000,000 shares authorized;
        183,849,710 and 158,482,171 shares issued and outstanding, respectively        183,850                158,482
      Additional paid in capital                                                    15,511,249             12,046,817
      Accumulated deficit                                                          (26,321,472)           (22,634,400)
                                                                                  ------------           ------------

TOTAL STOCKHOLDERS' DEFICIT                                                        (10,626,373)           (10,429,101)
                                                                                  ------------           ------------
      TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                                 $  3,349,875              3,121,785
                                                                                  ============           ============
--------------------------------------------------------------------------------

         See notes to these condensed consolidated financial statements

                                      F-2
ACCUPOLL HOLDING CORP. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
         FOR THE THREE MONTH PERIODS ENDED SEPTEMBER 30, 2004 AND 2003

                                             (Unaudited)
                                    September 30,    September 30,
                                         2004            2003
                                    (As Restated)    (As Restated)
                                    -------------    -------------
NET SALES                           $     494,244    $

COST OF SALES                             329,357
                                    -------------    -------------
GROSS PROFIT                              164,887

OPERATING EXPENSES
       General and administrative       1,315,155          915,290
       Professional fees                2,191,277           87,327
                                    -------------    -------------
                                        3,506,432        1,002,617
                                    -------------    -------------
OPERATING LOSS                         (3,341,545)      (1,002,617)

INTEREST EXPENSE, NET                     345,527          610,073
                                    -------------    -------------
NET LOSS                            $  (3,687,072)   $  (1,612,690)
                                    =============    =============
BASIC AND DILUTED LOSS
    PER COMMON SHARE                $       (0.02)   $       (0.02)
                                    =============    =============
WEIGHTED AVERAGE NUMBER OF COMMON
    SHARES OUTSTANDING                175,165,060      113,236,887
                                    =============    =============

         See notes to these condensed consolidated financial statements

                                      F-3
ACCUPOLL HOLDING CORP.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
          FOR THE THREE MONTH PERIODS ENDED SEPTEMBER 30, 2004 AND 2003
(Unaudited)
                                                                               2004           2003
                                                                                          (As Restated)
                                                                           -----------    ------------
Cash flows from operating activities:
     Net loss                                                              $(3,687,072)   $(1,612,690)
     Adjustments to reconcile net loss to net cash
       used in operating activities:
         Depreciation and amortization                                         693,874             --
         Amortization of estimated fair value of warrants
            granted and beneficial conversion feature in connection with
            the issuance of convertible notes payable                               --        110,033
         Amortization of beneficial conversion feature in connection
            with the issuance of subordinated convertible notes                     --        500,000
         Beneficial conversion feature expense                                 312,500             --
         Estimated fair value of options and warrants granted
            for services                                                            --        168,000
         Vesting of previously issued stock options                                 --        136,545
         Estimated fair value of common stock issued
            for services                                                            --         32,930
         Options and warrants granted for services                           1,462,900             --
         Changes in operating assets and liabilities:
            Accounts receivable                                                (49,000)            --
            Inventories                                                         68,863             --
            Prepaid expenses and other assets                                 (276,294)       (37,765)
            Accounts payable and accrued expenses                             (123,823)       225,971
            Related party payables                                             (14,000)        61,490
            Deferred income                                                    (39,241)            --
                                                                           -----------    -----------
     Net cash used in operating activities                                  (1,651,293)      (415,486)
                                                                           -----------    -----------
Cash flows from investing activities:
     Increase in deferred acquisition costs                                         --        (81,000)
     Increase in capitalized software development costs                         (5,361)      (360,330)
                                                                           -----------    -----------

     Net cash used in investing activities                                      (5,361)      (441,330)
                                                                           -----------    -----------
Cash flows from financing activities:

     Proceeds from the issuance of notes payable to related parties                 --         50,000
     Principal payments on notes payable to related parties                    (10,000)            --
     Proceeds from issuance of convertible subordinated debt                        --        500,000
     Proceeds from issuance of convertible notes payable                       512,500        200,000

     Proceeds from the issuance of common stock, net of commissions          1,774,896         25,000
     Proceeds from issuance of common stock upon exercise of warrants,
       net of commissions                                                       39,430        152,786
                                                                           -----------    -----------
     Net cash provided by financing activities                               2,316,826        927,786
                                                                           -----------    -----------

Net increase in cash                                                           660,172         70,970
Cash at beginning of period                                                    113,789             --
                                                                           -----------    -----------
Cash at end of period                                                      $   773,961    $    70,970
                                                                           ===========    ===========
Supplemental disclosure of non-cash financing and operating activities:

See accompanying notes to the condensed  consolidated  financial  statements for
additional information relating to non-cash investing and financing activities.

--------------------------------------------------------------------------------

                                      F-4
ACCUPOLL HOLDING CORP.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (UNAUDITED)

NOTE 1: BASIS OF REPORTING

The accompanying  condensed consolidated financial statements have been prepared
in accordance with the Securities and Exchange  Commission's ("SEC") regulations
for interim financial information.  Accordingly,  they do not include all of the
disclosures  required by accounting  principles generally accepted in the United
States of America  ("GAAP")  for a complete  set of  financial  statements.  The
unaudited condensed consolidated financial statements should, therefore, be read
in conjunction with the consolidated  financial  statements and notes thereto in
the Form 10-K/A  annual  report of the Company,  as amended,  for the year ended
June 30, 2004. In the opinion of management, all adjustments (which consist only
of  normal  and  recurring   adjustments)   considered   necessary  for  a  fair
presentation  have been included.  The results of operations for the three-month
period ended  September 30, 2004 are not  necessarily  indicative of the results
that may be expected for the entire fiscal year.

GOING CONCERN CONSIDERATIONS

The accompanying  condensed  consolidated  financial statements are presented on
the basis that the Company will continue as a going  concern which  contemplates
the  realization of assets and the  satisfaction  of liabilities in the ordinary
course of business  over a reasonable  length of time.  The Company has incurred
significant  operating  losses  and has used  cash in its  operations  since its
inception.  Most of this cash was  expended in the  development  of software and
systems infrastructure and in organization development and staffing. Other funds
were invested in the development and protection of  intellectual  property,  and
financial investment advisory fees and commissions related to fund raising.

At September  30, 2004,  the Company has an  accumulated  deficit  approximating
$26,321,000. Further, the Company has not generated any revenues from its Voting
System (see "Nature of Operations" below) operations,  and there is no assurance
of any future  revenues.  Consequently,  the Company  will  require  substantial
additional  funding  for  continuing  the  development,   obtaining   regulatory
approval,  and commercialization of its product.  There is no assurance that the
Company will be able to obtain  sufficient  additional funds when needed or that
such funds,  if  available,  will be  obtainable  on terms  satisfactory  to the
Company.

Management has taken actions to address these matters, which include:

o        Retention of experienced management personnel with particular skills in
         the commercialization of such products;

o        Attainment  of  technology  to develop  such  products  and  additional
         products; and

o        Raising  additional  funds  through  the  sale  of debt  and/or  equity
         securities.

Federal, State and various foreign government regulations govern the sale of the
Company's products.  There can be no assurance that the Company will receive the
regulatory approval required to market its proposed products.

The Company has incurred losses through September 30, 2004, had negative working
capital  at  that  date  of  approximately  $4.3  million,  and  has a  lack  of
operational  history which,  among other factors,  raise substantial doubt about
its  ability  to  continue  as a going  concern.  The  Company  intends  to fund
operations through sales of the Voting System, but there is no commitment by any
entities  for the purchase of any of the  proposed  products.  In the absence of
significant sales and profits, the Company may seek to raise additional funds to
meet its working  capital  requirements  through  debt and/or  equity  financing
arrangements  (see Notes 8 and 9). Management  believes that such  arrangements,
combined  with  the net  proceeds  from  planned  capital  transactions  will be
sufficient to fund the Company's capital expenditures, working capital needs and
other cash  requirements  for the year  ending  June 30,  2005.  The  successful
outcome of future  activities cannot be determined at this time, and there is no
assurance that, if achieved,  the Company will have sufficient  funds to execute
its intended business plan or generate positive operating results.

These circumstances,  combined with the potential liability discussed in Note 2,
raise  substantial  doubt  about the  Company's  ability to  continue as a going
concern. The accompanying  consolidated  financial statements do not include any
adjustments that might result from the outcome of this uncertainty.

                                      F-5
PRINCIPLES OF CONSOLIDATION

The  accompanying   condensed  consolidated  financial  statements  include  the
accounts of AccuPoll  Holding Corp. (a Nevada  Corporation) and its wholly owned
subsidiaries, AccuPoll, Inc. and Z Prompt, Inc. ("Z Prompt"). In accordance with
Financial Accounting Standards Board ("FASB") Interpretation ("FIN") No. 46, the
accounts of Web Tools International, Inc. ("WTI") have not been consolidated for
the three months ended September 30, 2004 (see "De-Consolidation of WTI" below).
All significant  inter-company balances and transactions have been eliminated in
consolidation.

Except where the context requires otherwise, the entities named in the preceding
paragraph are hereinafter collectively referred to as the "Company."

As discussed in Note 3, Z Prompt filed for bankruptcy  protection in March 2004.
The accompanying financial statements do not include any adjustments that may be
required in connection with restructuring Z Prompt, as it proposes to reorganize
under Chapter 11 of the  Bankruptcy  Code. In addition,  as described  elsewhere
herein,  the Company and certain of its officers and principal  stockholders are
presently  involved in civil  litigation  with certain former  stockholders  and
officers of Z prompt.  Management has determined that it would not be meaningful
to de-consolidate  the accounts of Z prompt at this time because the Company (a)
has a substantial  negative investment in Z prompt as of September 30, 2004, and
(b) expects to re-gain control of this subsidiary  based on the expectation that
Z prompt will be able to  negotiate a confirmed  reorganization  plan and emerge
from  bankruptcy  by  approximately  March  of 2005.  See Note 3 for  additional
information regarding Z prompt. Accordingly,  the Company has not deconsolidated
the  accounts  of Z Prompt in its  September  30,  2004  consolidated  financial
statements.

NATURE OF OPERATIONS

AccuPoll,  Inc.  is  engaged  in the  design  and  development  of an  intuitive
touch-screen  interface  (the "Voting  System")  that  provides a polling  place
electronic voting solution that is confidential,  reliable, accurate, immediate,
secure and  auditable.  While  maintaining  and  preserving  the  current  voter
experience,  the Company adds the ability to  accurately  capture in  electronic
form a voter's true intent, while simultaneously  preserving the legally binding
vote - the  official  paper  ballot.  The  Voting  System  has  the  ability  to
simultaneously  produce two different  electronic audit trails (recorded on both
the polling place administrative work station and the local voting station),  in
addition to generating a printed-paper  ballot.  The Company completed a reverse
merger with a publicly traded company in May 2002 and its common stock is quoted
on the Over-The-Counter Bulletin Board under the symbol "ACUP."

Z Prompt provides a number of standard service  programs,  as well as customized
programs,  to fit the special  needs of its  customers.  Z Prompt,  Inc.  offers
services such as on-site hardware service,  installation and training, inventory
management and preventive maintenance.

WTI  was   incorporated   in   1996   and  is   owned   and   operated   by  two
stockholders/officers  of  AccuPoll  Holding  Corp.  WTI is in the  business  of
software   engineering  in  various  computer  languages  with  an  emphasis  on
Linux/Apache, Sun Solaris and Microsoft NT/Win2K platforms.

                                      F-6
STOCK-BASED EMPLOYEE COMPENSATION

As of September  30, 2004,  the Company has not adopted a  stock-based  employee
compensation  plan.  The  Company  accounts  for  stock-based   compensation  to
employees  under  the  recognition  and  measurement  principles  of  Accounting
Principles  Board  ("APB")  Opinion  No.  25,  "Accounting  for Stock  Issued to
Employees,"  and  related  Interpretations.   The  Company  did  not  incur  any
stock-based employee  compensation cost for the three months ended September 30,
2004 or 2003 under APB  Opinion  No. 25. The  following  table  illustrates  the
pro-forma  effect  on net  loss and loss per  common  share if the  Company  had
applied  the  fair  value  recognition  provisions  of  Statement  of  Financial
Accounting   Standards   ("SFAS")   No.   123,   "Accounting   for   Stock-Based
Compensation," to stock-based employee compensation for the indicated periods.

                                            Three Months Ended
                                               September 30,
                                      ---------------------------
                                            2004         2003
                                      (As Restated)  (As Restated)
                                      -------------  ------------
Net loss available to common           $(3,687,072)   $(1,751,690)
stockholders, as reported *
Pro forma compensation expense            (181,710)     (355,000)
                                      -------------  ------------
Pro forma net loss available to
common stockholders                    $(3,868,782)   $(2,106,690)
                                      =============  ============
Loss per common share, as reported
   Basic and diluted                   $     (0.02)   $     (0.02)
                                      =============  ============
Loss per common share, pro forma
   Basic and diluted                   $     (0.02)   $     (0.02)
                                      =============  ============

* These amounts include interest related to certain equity  instruments  subject
to rescission (see Note 2).

INVENTORIES

Inventories  are stated at the lower of cost or  estimated  market  and  consist
entirely of finished goods.  Cost is determined on a weighted average basis that
approximates the first-in,  first-out method.  Market is estimated by comparison
with recent  purchases or net realizable  value.  Such net  realizable  value is
based on management's  forecast for sales of the Company's  products or services
in  the  ensuing  years.   The  industry  in  which  the  Company   operates  is
characterized  by  technological  advancement and change.  Should demand for the
Company's products prove to be significantly less than anticipated, the ultimate
realizable value of the Company's  inventories could be substantially  less than
the amount shown in the accompanying condensed consolidated balance sheets.

REVENUE RECOGNITION

The Company  records  sales when goods are  shipped to the  customer or upon the
completion  of the service.  Amounts  received  prior to the  completion  of the
earning process,  such as maintenance contracts paid in advance, are included in
deferred revenues in the accompanying condensed consolidated balance sheets.

The SEC issued Staff Accounting Bulletin 104 ("SAB 104"), "REVENUE RECOGNITION,"
which  outlines the basic  criteria  that must be met to  recognize  revenue and
provides  guidance for  presentation of revenue and for  disclosures  related to
revenue  recognition  policies  in  financial  statements  filed  with  the SEC.
Management  believes that the Company's  revenue  recognition  accounting policy
conforms to SAB 104.

                                      F-7
IMPAIRMENT OF LONG LIVED-ASSETS

The Company  periodically  evaluates the carrying value of its long-lived assets
under the provisions of SFAS No. 144, "Accounting for the Impairment or Disposal
of Long-Lived Assets." SFAS No. 144 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  Effects  of the  Disposal  of a Segment of a
Business,  and  Extraordinary,  Unusual and  Infrequently  Occurring  Events and
Transactions,"  for the  disposal  of a segment  of a  business  (as  previously
defined in that Opinion).  SFAS No. 144 also amends Accounting Research Bulletin
("ARB") No. 51, "Consolidated  Financial Statements," to eliminate the exception
to consolidation of a subsidiary when control is likely to be temporary.

SFAS No. 144 requires impairment losses to be recorded on long-lived assets used
in  operations,  including  amortizable  intangible  assets when  indicators  of
impairment are present. Indicators of impairment include an economic downturn or
a change in the  assessment  of future  operations.  In the event a condition is
identified  that may indicate an  impairment  issue,  an assessment is performed
using a variety of methodologies, including analysis of undiscounted future cash
flows,  estimates of sales proceeds and independent  appraisals.  If such assets
are impaired, the impairment to be recognized is measured by the amount by which
the carrying amount of the asset exceeds the estimated fair value of the assets.
Assets to be disposed  of are  reported  at the lower of the  carrying  value or
estimated fair value, less cost to sell.

LOSS PER COMMON SHARE

The following is a  reconciliation  of the  numerators and  denominators  of the
basic and diluted loss per common share computations for the three-month periods
ended September 30, 2004 and 2003:

                                           2004           2003
                                                     (As Restated)
                                      --------------  ------------
Net loss                               $ (3,687,072)  $(1,612,690)
Interest related to equity
instruments subject to rescission          (100,000)     (139,000)
                                      --------------  ------------
Dilutive net loss available to
common stockholders                    $ (3,787,082)  $(1,751,690)
                                      ==============  ============
Shares used to compute loss per
common share                            175,165,060   113,236,887
                                      ==============  ============
Basic and diluted loss per common
share:                                 $      (0.02)  $     (0.02)
                                      ==============  ============

                                      F-8
DE-CONSOLIDATION OF WTI

In January 2003, the FASB issued FIN No. 46, "Consolidation of Variable Interest
Entities, an Interpretation of ARB 51." The primary objectives of FIN No. 46 are
to provide  guidance  on the  identification  of entities  for which  control is
achieved through means other than voting rights (variable interest entities,  or
"VIEs"),  and  how to  determine  when  and  which  business  enterprise  should
consolidate the VIE. This new model for  consolidation  applies to an entity for
which  either:  (a) the equity  investors  do not have a  controlling  financial
interest;  or (b) the equity  investment at risk is insufficient to finance that
entity's activities without receiving additional  subordinated financial support
from other  parties.  In  addition,  FIN No. 46  requires  that both the primary
beneficiary and all other enterprises with a significant  variable interest in a
VIE make  additional  disclosures.  As amended in December  2003,  the effective
dates  of FIN No.  46 ("FIN  46-R")  for the  Company  are as  follows:  (a) For
interests in special-purpose entities: the first period ended after December 15,
2003;  and (b) For all other types of VIEs:  the first  period ended after March
15, 2004.

As disclosed in the notes to the Company's June 30, 2004 consolidated  financial
statements  previously filed with the SEC in amended Form 10-K/A, the Company is
associated with WTI through common ownership;  however,  even though the Company
was virtually WTI's only customer for software development services,  the master
services agreement with the Company expired March 31, 2004. Since that date, the
Company has not used the  services of WTI  because the  software  for the Voting
System is now substantially  complete;  any additional computer programming that
may be necessary will be provided by Company  employees (some of whom are former
WTI  employees).  At this time,  WTI is virtually a dormant entity with just two
minor customers and only a few employees.  Although the Company's  September 30,
2004 payable to WTI is a substantial amount (see note 10), there is no intent to
pay this liability in the foreseeable  future.  Given its minimal  operations at
this time, management believes that WTI is no longer dependent for its continued
existence upon additional subordinated financial support from the Company or its
controlling stockholders.  For these reasons,  management has concluded that the
Company  is  no  longer  the  primary  beneficiary  of  WTI .  Accordingly,  the
accompanying financial statements do not include the accounts of WTI.

SEGMENT INFORMATION

SFAS 131, "Disclosures about Segments of an Enterprise and Related Information,"
changed the way public  companies  report  information  about  segments of their
business  in their  annual  financial  statements  and  requires  them to report
selected segment information in their quarterly reports issued to shareholders.

It also  requires  entity-wide  disclosures  about the  products and services an
entity provides,  the foreign countries in which it holds significant assets and
its major customers. At September 30, 2004 and 2003, the Company operates in one
segment, as disclosed in the accompanying condensed  consolidated  statements of
operations.

RECLASSIFICATIONS

Certain  reclassifications  have  been  made to the  prior  period  consolidated
financial statements to conform to the current year presentation.

NOTE 2: EQUITY INSTRUMENTS SUBJECT TO RESCISSION

The Company may be subject to possible claims for rescission with respect to the
sale or other issuances of certain common stock, options and warrants.

The Company has offered and sold a substantial  number of shares of common stock
and warrants and options to purchase common stock without registration under the
Securities  Act of 1933, as amended,  (the  "Securities  Act") or  qualification
under  state  securities  laws.  If any offer or sale were not exempt  from,  or
otherwise  not subject  to,  federal and state  registration  and  qualification
requirements, the purchaser would have a number of remedies, including the right
to  rescind  the  purchase.  The  Securities  Act  requires  that any  claim for
rescission  be brought  within one year of the  violation.  The Company has sold
approximately  9,768,000  shares of common  stock and  warrants  and  options to
purchase  shares  of  common  stock  in the  United  States  within  one year of
September 30, 2004. The time periods within which claims for rescission  must be
brought under state  securities  laws vary and may be two years or more from the
date of the  violation.  The Company  sold  approximately  14 million  shares of
common stock and warrants and options to purchase  shares of common stock in the
United States within two years of September 30, 2004.

                                      F-9
Management is unable to determine at this time whether any claim for  rescission
may be filed against the Company; however, there can be no assurance that claims
will not be asserted.  In addition,  regulatory  agencies  could launch a formal
investigation and/or institute an enforcement proceeding against the Company.

The Company  accounts for common stock and other equity  instruments that may be
subject to rescission claims as a put liability based on estimated fair value in
accordance  with  the  SEC's  promulgated   accounting  rules  and  interpretive
releases.  Since equity instruments  subject to rescission are redeemable at the
holder's  option or upon the occurrence of an uncertain  event not solely within
the Company's control, such equity instruments are outside the scope of SFAS No.
150 and its related  interpretations.  Under the SEC's  interpretation  of GAAP,
reporting such claims outside of stockholders' equity (as "mezzanine equity") is
required,  regardless  of how  remote the  redemption  event may be.  Thus,  the
Company has reported  approximately  $6.3 million as  "mezzanine  equity" in the
accompanying September 30, 2004 condensed consolidated balance sheet.

As previously  reported,  the Company's  prior year  financial  statements  were
restated.  In addition,  all  financial  information  included in these notes to
consolidated  financial statements for the first quarter of fiscal 2004 has been
adjusted.

NOTE 3: BANKRUPTCY FILING BY WHOLLY OWNED SUBSIDIARY

On March 23, 2004 (the  "Petition  Date"),  Z Prompt (or the  "Debtor")  filed a
voluntary  petition for relief (the  "Chapter 11 Case") under  Chapter 11 of the
United  States  Bankruptcy  Code (the  "Bankruptcy  Code") in the United  States
Bankruptcy  Court  for the  Central  District  of  California  (the  "Bankruptcy
Court").  Since the Petition  Date, Z Prompt has  continued to conduct  business
activities as a debtor-in-possession under the Bankruptcy Code.

The  accompanying  consolidated  financial  statements  have  been  prepared  in
accordance  with GAAP  applicable to a going concern,  which assumes that assets
will be realized and  liabilities  will be discharged in the ordinary  course of
business.  As a result of the  Chapter 11 Case,  the  realization  of Z Prompt's
assets and the liquidation of its liabilities are subject to uncertainty. In the
Chapter 11 Case, a  substantial  portion of the Debtor's  liabilities  as of the
Petition  Date is  subject  to  compromise  or other  treatment  under a plan of
reorganization.  Generally,  actions to enforce or otherwise effect repayment of
all  pre-Chapter 11 liabilities (as well as any pending  litigation  against the
Debtor, absent a stipulation to the contrary) are stayed while Z Prompt operates
as a  debtor-in-possession  during bankruptcy  proceedings.  Schedules have been
filed by the Debtor with the  Bankruptcy  Court  setting  forth the  liabilities
(approximately $ 1 million) and assets of Z Prompt as of the Petition Date based
on its unaudited  accounting  records.  Differences between amounts reflected in
such  schedules  and claims filed by creditors  will be  investigated,  and will
either be amicably resolved or adjudicated by the Bankruptcy Court. The ultimate
amount and settlement terms of such liabilities are not presently determinable.

Financial  accounting  and reporting  during a Chapter 11 case are prescribed by
Statement   of  Position   No.   90-7,   FINANCIAL   REPORTING  BY  ENTITIES  IN
REORGANIZATION  UNDER THE BANKRUPTCY CODE ("SOP 90-7"). For financial  reporting
purposes,  Z Prompt's  pre-petition  liabilities and  obligations,  which may be
subject to  settlement  or otherwise  dependent on the outcome of the Chapter 11
case, have been segregated and classified as "liabilities subject to compromise"
in the accompanying  September 30, 2004 condensed consolidated balance sheet. In
addition,  the Company will report all significant Z Prompt  transactions (other
than   interest   expense)   directly   related  to  the   Chapter  11  Case  as
"reorganization   items"  in  its  future  statements  of  operations.   Certain
additional disclosures including (a) claims not subject to reasonable estimation
of the amount to be allowed and (b) any significant  difference between reported
interest  expense  and stated  contractual  interest  will be provided in future
financial   statements   (as  required  by  SOP  90-7)  when  such  amounts  are
determinable and/or when the related transactions occur.

Management continues to conduct business activities under the supervision of the
Bankruptcy  Court  and,  among  other  things,  the  Debtor is granted a 120-day
exclusive  right to propose a plan of  reorganization  which must be approved by
the creditors  and confirmed by the  Bankruptcy  Court.  In accordance  with the
Bankruptcy Code, an automatic stay provides that creditors of Z Prompt and other
parties in interest are prevented from seeking repayment of pre-petition  debts.
Additionally, unless otherwise approved by the Bankruptcy Court, the Debtor must
refrain from paying any pre-petition indebtedness.

                                      F-10
Z  Prompt's  bankruptcy  filing  resulted  in  non-payment  of  the  April  2004
installment  owed to a secured  creditor  under a line of credit  agreement (see
Note 5). Because of this event,  such  indebtedness is in default and is now due
and payable.  The repayment,  if any, of such  indebtedness will be a subject of
the reorganization  plan. An important element in successfully  reorganizing the
Debtor will be the ability to restructure certain liabilities in order to reduce
indebtedness and provide funding for operations.

On  April  20,  2004,  the  Bankruptcy  Court  approved  a  debtor-in-possession
financing  arrangement  whereby Z Prompt is  permitted  to  obtain  credit  from
AeroFund  Financial,  Inc.  of no more than  $500,000  through  the sale  and/or
factoring of its  post-petition  accounts  receivable;  this credit  facility is
collateralized by a security interest in such accounts receivable.

Although  legal fees and other  administrative  expenses  to complete Z Prompt's
bankruptcy  proceedings  may  be  significant,   they  are  not  susceptible  to
reasonable estimation at this time; accordingly,  the accompanying September 30,
2004 condensed  consolidated  financial  statements do not include any provision
for such costs not yet incurred by the Debtor.

Z Prompt  could  decide to reject  some or all of its lease  obligations  in the
Chapter 11 Case.  This action may result in lease  rejection  claims pursuant to
the Bankruptcy Code; any such claims would then be adjudicated by the Bankruptcy
Court. No expenses for any possible lease  rejection  claims have been reflected
in the Company's September 30, 2004 condensed consolidated financial statements.

As part of the process of attempting to reorganize, Z Prompt is pursuing various
financing alternatives that may be available, although there can be no assurance
that the Debtor will be able to  successfully  implement any such  alternatives.
Though Z Prompt  intends to make  efforts to  increase  its  revenues to improve
operations,  it is possible that losses will continue for the foreseeable future
and the Debtor will  require  additional  funding and  financial  support from a
third party and/or its parent  company.  There can be no assurance that any such
additional  financing will be available on acceptable terms, that such funds (if
available) would enable Z Prompt to continue operating,  or that the Debtor will
be  successful in increasing  its revenues.  In addition,  there is no assurance
that the creditors and the Bankruptcy Court will approve a  reorganization  plan
that will allow Z Prompt to survive.

                                      F-11
Condensed  balance  sheet  information  of Z prompt as of September 30, 2004 and
results of operations  for the quarter ended is presented  below.  No comparable
information  is presented for the three months ended  September 30, 2003 because
the  acquisition  of Z Prompt was not recorded  for  accounting  purposes  until
November 2003.

                                  Z PROMPT INC.
                                  BALANCE SHEET

             ASSETS                              September 30, 2004
                                                    (unaudited)

CURRENT ASSETS

      Cash                                       $           48,675
      Accounts receivable, net                              296,699
      Inventories                                            44,723
                                                 ------------------
                                                            390,097
OTHER, net                                                    7,950
                                                 ------------------
      TOTAL ASSETS                               $          398,047
                                                 ==================

LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
      Accounts payable and accrued expenses      $          216,865
      Loan from parent company                              823,380
      Deferred revenues                                      35,387
      Liabilities subject to compromise                     732,470
                                                 ------------------
      TOTAL LIABILITIES                                   1,808,102
                                                 ------------------
STOCKHOLDERS' DEFICIT                                    (1,410,055)
                                                 ------------------
TOTAL LIABILITIES AND DEFICIT                    $          398,047
                                                 ==================

                                      F-12
Z PROMPT INC.
                       STATEMENT OF OPERATIONS (UNAUDITED)
                      THREE MONTHS ENDED SEPTEMBER 30, 2004

NET SALES                         $   494,244
COST OF SALES                         329,357
                                  -----------
GROSS PROFIT                          164,187

EXPENSES

 General and administrative            99,872
 Salaries and related                  54,967
 Interest                               3,128
                                  -----------
                                      157,697
                                  -----------
PRETAX INCOME                     $     7,190
                                  ===========

The September 30, 2004 balances of Z Prompt's liabilities that became subject to
compromise on March 23, 2004 are as follows:

Accounts payable and accrued expenses                          $     336,470
Line of credit payable to a financial institution (Note 5)           225,000
Notes payables to related parties                                    171,000
                                                               -------------
             Total                                             $     732,470
                                                               =============

NOTE 4: CAPITALIZED SOFTWARE DEVELOPMENT COSTS

In accordance with SFAS No. 86 "Accounting for the Costs of Computer Software to
be Sold, Leased, or Otherwise  Marketed," the Company  capitalizes certain costs
related to the  development  of new  software  products  or the  enhancement  of
existing software products for sale or license. These costs are capitalized from
the  point in time  that  technological  feasibility  has been  established,  as
evidenced by a working model or detailed  working-program design to the point in
time that the product is available for general release to customers. Capitalized
software  development  costs are  amortized  on a  straight-line  basis over the
three-year  estimated  economic life of the products,  beginning (as applicable)
with  the  general  product  release  to  customers  or when the  Voting  System
qualified  under  certain  federal  standards.  Research and  development  costs
incurred  prior to  establishing  technological  feasibility  and costs incurred
subsequent  to the events  described  in the  preceding  sentence are charged to
expense as incurred.

The Company periodically evaluates whether events or circumstances have occurred
that  indicate  that the  remaining  useful  lives of the  capitalized  software
development costs should be revised or that the remaining balance of such assets
may not be  recoverable.  At September  30, 2004,  management  believes  that no
revisions to the remaining  useful lives or write-down of  capitalized  software
development  costs are required.  The Company began  amortizing its  capitalized
software development costs in April 2004, following the March 2004 qualification
of its Voting System as complying with certain federal voting system  standards;
at September 30, 2004, accumulated amortization approximated $925,000.

                                      F-13
NOTE 5: LINE OF CREDIT

The  Company  has a  revolving  line of credit  agreement  (the  "Line")  with a
financial  institution  that matured in August 2004, as amended.  The Line bears
interest  at 5% per annum.  A  shareholder  of the  Company who is also a former
majority  shareholder  of Z Prompt  guaranteed  the Line.  The terms of the Line
provided for borrowings of up to $280,000.  At September 30, 2004, the Company's
outstanding  borrowings  totaled  $225,000,  which are  included in  liabilities
subject  to  compromise  on  the  accompanying   September  30,  2004  condensed
consolidated balance sheet.

NOTE 6: CONVERTIBLE DEBT

On July 2nd 2004, through a private placement  memorandum,  the Company issued a
$625,000 convertible debenture.  The "Convertible Note" bears interest at 8% per
annum On September 08, 2004,  Accupoll  Inc.  repaid  $312,500.  The balance was
converted into 3,125,000  shares of common stock,  at a price value of $0.15 per
share in October 2004.

The convertible  feature of this note payable  provides for a rate of conversion
that is below  market  value of the  common  stock.  This  feature  is  normally
characterized as a beneficial  conversion feature ("BCF").  Pursuant to Emerging
Issues  Task Force  ("EITF")  Issue No.  98-5  ("EITF  98-5"),  "Accounting  For
Convertible  Securities  with  Beneficial  Conversion  Features or  Contingently
Adjustable  Conversion  Ratio," and EITF Issue No. 00-27,  "Application  of EITF
Issue No. 98-5 To Certain  Convertible  Instruments,"  the Company has estimated
the fair value of such BCF to approximate $312,500 which has been amortized into
interest expense for the quarter ended September 30, 2004.

NOTE 7: OTHER COMMITMENTS AND CONTINGENCIES

In November 2002, the Company entered into a Location Incentives  Agreement (the
"Agreement")  with the Amarillo  Economic  Development  Corporation  ("AEDC") to
establish  the  Company's  customer  service  center and voting  machine  repair
operations in Amarillo,  Texas.  According to the terms of the  Agreement,  AEDC
will pay the  Company  $250,000  upon the  Company's  execution  of a lease  for
facilities in Amarillo.  The funds  advanced  under the Agreement are to be used
solely for the  operations  in  Amarillo.  If the Company  does not meet certain
minimum employment  requirements,  as defined,  it will be required to repay all
amounts advanced. In connection with the Agreement, the Company granted warrants
to  purchase  250,000  shares of the  Company's  restricted  common  stock at an
exercise price of $1.04 per share,  valued at  approximately  $205,000 (based on
the Black-Scholes  pricing model), which was expensed upon issuance.  In January
2003, the Company received the $250,000 and has included such amount in accounts
payable and accrued expenses in the accompanying  condensed consolidated balance
sheets,  as the  Company  has yet to  fulfill  its  obligations  related  to the
Agreement.

NOTE 8: STOCKHOLDERS' EQUITY (DEFICIT)

COMMON STOCK

         Holders of the company  common stock:  (i) have equal ratable rights to
dividends from funds legally available therefor, when, as and if declared by the
Board of  Directors;  (ii) are  entitled  to share  ratably in all of our assets
available for  distribution to  stockholders  upon  liquidation,  dissolution or
winding  up of our  affairs;  (iii)  do not  have  preemptive,  subscription  or
conversion  rights,  nor are there any  redemption  or sinking  fund  provisions
applicable  thereto;  and (iv) are entitled to one vote per share on all matters
on which  stockholders  may vote at all shareholder  meetings.  The common stock
does not have  cumulative  voting  rights,  which means that the holders of more
than fifty  percent of the common stock  voting for  election of  directors  can
elect one hundred percent of our directors if they choose to do so.

PREFERRED STOCK

         The  Company's  Articles of  Incorporation  authorize  80,000 shares of
preferred  stock,  $.01 par value per share.  The Company's  Board of Directors,
without  any action by  stockholders,  is  authorized  to divide the  authorized
shares  of   preferred   stock  into  series  and  to   designate   the  rights,
qualifications,  preferences,  limitations and terms of the shares of any series
of preferred stock,  including but not limited to dividend,  redemption,  voting
rights  and  preferences.  The  ability of the  company  Board of  Directors  to
designate  and issue such shares  could  impede or deter an  unsolicited  tender
offer  or  takeover  proposal  and the  issuance  of  additional  shares  having
preferential  rights could affect adversely the voting power and other rights of
holders of the common stock.

         The Company have not filed a certificate of designation with respect to
any series of preferred stock.  During the year ended June 30, 2003, the Company
agreed  to  issue a total of  71,529  shares  of  Series  A  Preferred  Stock as
collateral for secured notes. The parties have subsequently agreed to cancel the
transaction.  On December 31, 2003,  we agreed to issue 8,471 shares

                                      F-14
of Series A  Preferred  Stock to two  stockholders  of record  in  exchange  for
3,325,000 shares of common stock of Material Technologies,  Inc. On May 7, 2004,
the Company  rescinded this transaction.  Accordingly,  the Company currently do
not have any shares of preferred stock issued or outstanding.

JULY 2004 PRIVATE PLACEMENT

         In July 2004,  the company  completed a private  placement  transaction
with  four  accredited  investors,  pursuant  to which the  company  sold (1) an
aggregate  of  $625,000  principal  amount 8%  convertible  debentures,  and (2)
warrants to  purchase  312,500  shares of our common  stock.  From this  private
placement  the company  received  gross  proceeds of $625,000.  On September 13,
2004,  the  company  pre-paid  $312,500  of  the  principal  amount  of  the  8%
convertible debentures and the remaining $312,500 principal amount was converted
into  3,125,000  shares of our common stock.  Also on September 13, 2004, all of
the warrants were exercised at a price of $0.15 per share into 312,500 shares of
the common stock. The issuance of the 8% convertible  debentures,  the warrants,
and  the  shares  of  common  stock  upon  conversion  and  exercise  of  the 8%
convertible  debentures and warrants was exempt from registration under Rule 506
of Regulation D and/or  Section 4(2) of the  Securities Act of 1933, as amended.
The company is  registering  in this offering  3,437,500  shares of common stock
owned by the investors in this private placement from the conversion of their 8%
convertible debentures and the exercise of common stock purchase warrants.  J.P.
Turner & Company,  LLC acted as placement  agent for this  transaction.  For its
services as placement  agent,  the company issued J.P.  Turner & Company,  LLC a
warrant to purchase 520,833 shares of common stock,  exercisable for three years
at an exercise price of $0.12 per share. The company is also registering in this
offering  520,833  shares of common stock  issuable upon exercise of the warrant
held by J.P. Turner & Company, LLC.

SEPTEMBER  2004 PRIVATE PLACEMENT

         On  September  13,  2004,  the company  completed  a private  placement
transaction with eleven accredited investors, pursuant to which the company sold
an aggregate of 3,666,447  shares of common stock,  1,833,227 Series A Warrants,
1,833,227  Series B  Warrants  and  1,833,227  Series  C  Warrants  (the  "First
Closing").  The company received gross proceeds  approximating  $1,650,000.  For
each two shares of common stock, the company issued investors one A Warrant, one
B Warrant and one C Warrant.  Each two shares and three  warrants were sold at a
total price of $0.90. The private placement was exempt from  registration  under
Rule 506 of Regulation D of the Securities Act of 1933, as amended.

         The Company agreed to file with the Securities and Exchange  Commission
not later than 30 days  following  the closing  date,  and cause to be effective
within 120 days after the closing  date,  a  registration  statement in order to
register  the  shares of common  stock  issued to the  investors  and the shares
underlying  the warrants,  including  warrant  shares  issuable upon exercise of
warrants  issued to the  placement  agent  (the  "Registration  Statement").  In
addition,  on one  occasion,  for a period  commencing  91 day after the closing
date, but not later than two years after the closing date,  upon written request
of the holders of more than 50% of the shares and warrant shares actually issued
upon  exercise  of  warrants,  the  Company is  required  to prepare  and file a
Registration  Statement.  The A  Warrants  expire  150  days  from  the date the
Registration  Statement  is declared  effective  by the  Securites  and Exchange
Commission and are  exercisable at $0.12 per share.  The B Warrants  expire four
years after the date the  Registration  Statement  is declred  effective  by the
Securities and Exchange Commission and are exercisable at $0.15 per share. The C
warrants  expire  three  years  after  the date the  Registration  Statement  is
declared effective by the Securities and Exchange Commission and are exercisable
at $0.50 per share.

         The Company may call the  warrants  beginning 30 trading days after the
effective date of the  Registration  Statement and ending 30 trading days before
the expiration of the warrants. A call notice may be given by AccuPoll for the A
Warrants  only within five trading days after the common stock has had a closing
price as reported for the principal market of $0.24 or higher for 15 consecutive
trading  days.  A call notice may be given by AccuPoll  for the B Warrants  only
within  five  trading  days  after the common  stock has had a closing  price as

                                      F-15
reported for the principal market of $0.30 or higher for 15 consecutive  trading
days.  A call notice may be given by the Company for the C Warrants  only within
five trading days after the common stock has had a closing price as reported for
the principal market of $1.00 or higher for 15 consecutive trading days.

         The shares of common  stock sold and the common  stock  underlying  the
warrants issued to the investors and the placement agent described above in Note
8 and in note 9  below  are  restricted  stock  as  defined  in Rule  144 of the
Securities Act of 1933 (as amended) until the Registration Statement is declared
effective by the Securities and Exchange Commission.

         On November 4, 2004, certain of the terms of the September 2004 Private
Placement were amended with a second round (See Note 9 below).

NOTE 9: SUBSEQUENT EVENTS

NOVEMBER 2004 PRIVATE PLACEMENT

         On  November  4,  2004,  the  Company  completed  a  private  placement
transaction  with the same investors  from the First Closing,  pursuant to which
the company sold an aggregate of  6,050,000  shares of common  stock,  3,025,000
Series A Warrants,  3,025,000  Series B Warrants and 3,025,000 Series C Warrants
(the "Second  Closing").  The company received gross proceeds totaling $605,000.
For each two shares of common stock, the company issued investors one A Warrant,
one B Warrant and one C Warrant. Each two shares and three warrants were sold at
a  total  price  of  $0.20.  The  private   placement  was  deemed  exempt  from
registration  requirements  under Rule 506 of Regulation D of the Securities Act
of 1933. We are  registering in this offering  6,050,000  shares of common stock
and 9,075,000 shares issuable upon exercise of these outstanding warrants, which
includes  a good  faith  estimate  of  shares  of common  stock to  account  for
antidilution and price protection adjustments.

         The Second Closing triggered certain repricing adjustments to the terms
of the First Closing.  Accordingly, the purchase price for the First Closing was
adjusted  to $0.20 for each two shares  and three  warrants  that were sold.  As
adjusted,  the company IS obligated to issue an additional  12,832,552 shares of
common  stock,  6,233,501  Series A Warrants,  6,233,501  Series B Warrants  and
6,233,501 Series C Warrants.  For the First Closing,  the company is registering
in this  offering  16,498,999  shares of  common  stock  and  24,748,499  shares
issuable  upon  exercise of warrants,  which  includes a good faith  estimate of
shares of common stock to account for further  antidilution and price protection
adjustments.  The terms of the Series A Warrants,  the Series B Warrants and the
Series C Warrants, as adjusted are as follows:

         The Company agreed to file with the Securities and Exchange  Commission
not later than 30 days after the closing date of the Second  Closing,  and cause
to be effective within 120 days after the closing date of the Second Closing,  a
registration  statement  "rs" in order to  register  the shares of common  stock
issued to the investors and the shares  underlying  the warrants,  including the
shares  issuable upon exercise of warrants  issued to the  placement  agent.  In
addition,  on one  occasion,  for a period  commencing 91 days after the closing
date of the Second Closing,  but not later than two years after the closing date
of the Second  Closing,  upon written request of the holders of more than 50% of
the shares and warrant  shares  actually  issued upon exercise of warrants,  the
company is required to prepare and file a registration statement. The A Warrants
expire 150 days from the date the rs is declared effective by the Securities and
Exchange  Commission  and are  exercisable  at $0.12 per  share.  The B Warrants
expire four years after the date the rs is declared  effective by the Securities
and Exchange  Commission and are exercisable at $0.15 per share.  The C Warrants
expire three years after the date the rs is declared effective by the Securities
and Exchange Commission and are exercisable at $0.50 per share.

         The Company may call the  warrants  beginning 30 trading days after the
effective date of the rs and ending 30 trading days before the expiration of the
warrants.  A call  notice may be given by the  company  for the A Warrants  only
within  five  trading  days  after the common  stock has had a closing  price as
reported for the principal market of $0.24 or higher for 15 consecutive  trading
days.  A call notice may be given by the company for the B Warrants  only within
five trading days after the common stock has had a closing price as reported for
the principal market of $0.30 or higher for 15 consecutive  trading days. A call
notice may be given by the company for the C Warrants  only within five  trading
days  after  the  common  stock  has had a  closing  price as  reported  for the
principal market of $1.00 or higher for 15 consecutive trading days.

         Beginning  November 4, 2004 and until the  registration  statement  has
been  effective for 150 days,  the investors must be given at least ten business
days prior written notice of any proposed sale by the company of common stock or
other  securities or debt  obligations  except in  connection  with (a) employee
stock  options or  compensation  plans,  (b)  documented  legal fees, or (c) the
company already issued and outstanding  shares of common stock as of the closing
date of the Second  Closing.  Such  proposed  sales are referred to as "excepted
issuances."

                                      F-16
Other  than  the  excepted   issuances,   if  at  any  time  until  the
registration statement has been effective for 150 days, the company offer, issue
or agree to issue any common stock or securities convertible into or exercisable
for  shares  of  common  stock  (or  modify  any of the  foregoing  which may be
outstanding at any time prior to the closing date of the Second  Closing) to any
person or entity at a price per share or conversion or exercise  price per share
which shall be less than $0.10,  without the consent of each investor,  then the
company is  required  to issue,  for each such  occasion,  additional  shares of
common stock to each  investor so that the average per share  purchase  price of
the shares of common stock and the warrants  issued to the investor (of only the
common  stock or warrant  shares  still owned by the  investor) is equal to such
other lower price per share.  For purposes of this issuance and adjustment,  the
issuance of any security carrying the right to convert such security into shares
of common stock will result in the issuance of the  additional  shares of common
stock upon the issuance of such convertible security,  warrant,  right or option
and again upon any subsequent  issuances of shares of common stock upon exercise
of such  conversion or purchase rights if such issuance is at a price lower than
$0.10.

         The exercise price of the warrants is also subject to adjustment in the
event we effect a  reorganization,  consolidation or merger,  or transfer all or
substantially  all of our properties or assets.  Also, until the expiration date
of the  warrants,  if the company  issue any common  stock  other than  excepted
issuances,  prior to the complete  exercise of the warrants for a  consideration
less than the warrant exercise price that would be in effect at the time of such
issue, then the exercise price shall be reduced to such other lower issue price.
For purposes of this adjustment, the issuance of any security or debt instrument
carrying the right to convert such security or debt instrument into common stock
or of any warrant,  right or option to purchase  common stock shall result in an
adjustment  to the  exercise  price  upon the  issuance  of the  above-described
security, debt instrument, warrant, right, or option.

PLACEMENT AGENT FEE FOR THE FIRST CLOSING

         J.P.  Turner &  Company,  LLC  acted as  placement  agent for the First
Closing and for the Second Closing. For the First Closing, the company agreed to
pay J.P. Turner & Company a cash fee of 8% of the aggregate  purchase price. The
company  will also pay J.P.  Turner & Company 8% of the cash  proceeds  received
from the  exercise of  warrants  issued in  connection  with the  placement.  In
addition, the company issued J.P. Turner & Company a warrant to purchase 458,306
shares of common stock, exercisable for five years at an exercise price of $0.54
per  share.  Due to the price  adjustments  caused by the Second  Closing,  this
warrants  was  cancelled  and the company is  obligated  to issue J.P.  Turner &
Company a warrant to purchase 1,100,000 shares of common stock,  exercisable for
five years at an  exercise  price of $0.12 per  share.  Further,  J.P.  Turner &
Company will receive: (a) one Placement Agent's A Warrant,  exercisable at $0.14
per share,  for each eight A Warrants  exercised by an investor on a cash basis;
(b) one Placement  Agent's B Warrant,  exercisable at $0.18 per share,  for each
eight B Warrants exercised by an investor on a cash basis; and (c) one Placement
Agent's C Warrant,  exercisable  at $0.60 per  share,  for each eight C Warrants
exercised by an investor on a cash basis.  All  Placement  Agent's  Warrants are
exercisable for five years after the respective  issue dates, are not subject to
call and may be exercised on a cashless basis.

PLACEMENT AGENT FEE FOR THE SECOND CLOSING

         For the Second Closing, the company agreed to pay J.P. Turner & Company
a cash fee of 10% of the aggregate  purchase price. We will also pay J.P. Turner
& Company 8% of the cash proceeds  received from the exercise of warrants issued
in connection with the placement.  In addition, the company issued J.P. Turner &
Company  warrants to purchase  504,167 shares of common stock,  exercisable  for
five years at an  exercise  price of $0.12 per  share.  Further,  J.P.  Turner &
Company will receive: (a) one Placement Agent's A Warrant,  exercisable at $0.14
per share,  for each eight A Warrants  exercised by an investor on a cash basis;
(b) one Placement  Agent's B Warrant,  exercisable at $0.18 per share,  for each
eight B Warrants exercised by an investor on a cash basis; and (c) one Placement
Agent's C Warrant,  exercisable  at $0.60 per  share,  for each eight C Warrants
exercised by an investor on a cash basis.  All  Placement  Agent's  Warrants are
exercisable for five years after the respective  issue dates, are not subject to
call and may be  exercised  on a  cashless  basis.  We are  registering  in this
offering a total of 11,526,792  shares issuable upon exercise of warrants issued
or  issuable  to J.P.  Turner & Company  pursuant  to the First  Closing and the
Second  Closing,  which includes a good faith estimate of shares of common stock
to account for further antidilution and price protection adjustments.

NOTE 10: RELATED PARTY PAYABLE

At September 30, 2004, the Company owes $1,214,070 to WTI, an affiliated company
for services  under a master  services  agreement.  WTI is  affiliated  with the
Company through common ownership.  The obligation is noninterest bearing and not
subject to a maturity date.

                                      F-17
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors
AccuPoll Holding Corp.

We have audited the accompanying consolidated balance sheets of AccuPoll Holding
Corp. and  subsidiaries  ("the  "Company") as of June 30, 2004 and 2003, and the
related consolidated  statements of operations,  stockholders'  deficit and cash
flows for the period from August 9, 2001  (Inception)  through June 30, 2002 and
for the  years  ended  June 30,  2004 and  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  standards  of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and  perform  the  audits to  obtain  reasonable  assurance  about  whether  the
consolidated  financial statements are free of material  misstatement.  An audit
includes  examining,  on a test  basis,  evidence  supporting  the  amounts  and
disclosures in the  consolidated  financial  statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
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 AccuPoll Holding
Corp.  and  subsidiaries  as of June 30, 2004 and 2003, and the results of their
operations  and their cash flows for the period from August 9, 2001  (Inception)
through  June 30,  2002 and for the  years  ended  June 30,  2004 and  2003,  in
conformity with accounting principles generally accepted in the United States of
America.

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will continue as a going  concern.  As discussed in Note 1, the
Company  has losses from  operations  through  June 30, 2004 and an  accumulated
deficit of approximately $22.6 million at that date, negative working capital at
June 30, 2004  approximating  $6.8  million and a lack of  operational  history.
These factors, among others, raise substantial doubt about the Company's ability
to continue as a going  concern.  Management's  plans in regard to these matters
are described in Note 1. The  consolidated  financial  statements do not include
any adjustments that may result from the outcome of this uncertainty.

As discussed in Note 10 to the accompanying  consolidated  financial statements,
the Company may be subject to possible  rescission  claims regarding the sale or
other issuances of certain equity  instruments.  Accordingly,  the June 30, 2003
consolidated  balance sheet has been restated to reflect the potential liability
associated  with such  transactions.  As  discussed  in Note 11, an  expense  of
$655,000  relating to warrants issued for services that were not provided by the
vendor  was  recorded  during the year ended  June 30,  2003.  Accordingly,  the
consolidated  statement of operations  for the year then ended has been restated
to reduce the previously reported net loss by $655,000.

                   /S/ SQUAR, MILNER, REEHL & WILLIAMSON, LLP
                   NEWPORT BEACH, CALIFORNIA

                   SEPTEMBER 27, 2004

                                      F-18
ACCUPOLL HOLDING CORP.
                           CONSOLIDATED BALANCE SHEETS
                             June 30, 2004 and 2003
2004            2003
                                                                                                     (AS RESTATED)
                                                                                     ------------    ------------
                                  ASSETS
CURRENT ASSETS
      Cash                                                                           $    113,789    $         --
      Accounts receivable, net                                                            254,895              --
      Inventories                                                                         168,636              --
      Deferred acquisition costs                                                               --         144,206
      Prepaid expenses                                                                         --           2,500
      Total Current Assets                                                                     --              --
                                                                                          537,320         146,706
PROPERTY AND EQUIPMENT, net                                                                14,012              --
CAPITALIZED SOFTWARE DEVELOPMENT COSTS, net                                             2,544,207       1,403,899
OTHER ASSETS                                                                               26,246              --
                                                                                     ------------    ------------
      TOTAL ASSETS                                                                   $  3,121,785    $  1,550,605
                                                                                     ============    ============
                   LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
      Accounts payable and accrued expenses                                          $  1,817,284    $    931,503
      Related party payables                                                            1,228,070         872,940
      Deferred revenues                                                                    74,628              --
      Convertible debt. net of discount                                                 3,304,600              --
      Notes and accrued interest payable to related parties                                30,000         175,000
      Put liability related to warrant issuance                                           163,760         113,750
      Liabilities subject to compromise                                                   732,544              --
                                                                                     ------------    ------------
                                                                                        7,350,886       2,093,193
                                                                                     ------------    ------------
EQUITY INSTRUMENTS SUBJECT TO RESCISSION                                                6,200,000       4,377,033
                                                                                     ------------    ------------
COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' DEFICIT
      Convertible Series A preferred stock, $0.01 par value, 80,000 shares
      authorized, no shares issued or outstanding (liquidation preference of zero)             --              --
      Common stock, par value of $0.001, 600,000,000 shares
        authorized; 158,482,171 and 112,945,963 shares issued and outstanding
        at June 30, 2004 and 2003, respectively                                           158,482         112,946
      Additional paid-in capital                                                       12,046,817       2,222,580
      Accumulated deficit                                                             (22,634,400)     (7,255,147)
                                                                                     ------------    ------------
                                                                                      (10,429,101)     (4,919,621)
                                                                                     ------------    ------------
      TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                                    $  3,121,785    $  1,550,605
                                                                                     ============    ============
SEE ACCOMPANYING NOTES TO THESE CONSOLIDATED FINANCIAL STATEMENTS

                                      F-19
ACCUPOLL HOLDING CORP.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
      For The Years Ended June 30, 2004 and 2003, and For The Period From
                August 9, 2001 (Inception) Through June 30, 2002
YEAR ENDED      YEAR ENDED      PERIOD ENDED
                                       JUNE 30, 2004    JUNE 30, 2003    JUNE 30, 2002
                                                        (As Restated)
                                       -------------    -------------    -------------
NET SALES                              $   1,508,656    $          --    $          --
COST OF SALES                              1,185,797               --               --
                                       -------------    -------------    -------------
GROSS PROFIT                                 322,859               --               --
EXPENSES

      General and administrative           3,160,257        3,104,192          904,083
      Professional fees                    4,264,156        1,714,475        1,198,622
      Interest                             4,534,947           29,900          303,875
      Loss on disposal of investment       1,200,000               --               --
      Impairment of goodwill               2,542,752               --               --
                                       -------------    -------------    -------------
                                          15,702,112        4,848,567        2,406,580
                                       -------------    -------------    -------------
NET LOSS                               $ (15,379,253)   $  (4,848,567)   $  (2,406,580)
                                       =============    =============    =============
BASIC AND DILUTED LOSS
    PER COMMON SHARE                   $       (0.12)   $       (0.05)   $       (0.04)
                                       =============    =============    =============
WEIGHTED AVERAGE NUMBER OF COMMON
    SHARES OUTSTANDING                   130,782,481      106,687,447       68,735,272
                                       =============    =============    =============
SEE ACCOMPANYING NOTES TO THESE CONSOLIDATED FINANCIAL STATEMENTS

                                      F-20
ACCUPOLL HOLDING CORP.
                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
       For The Years Ended June, 30 2004 and 2003 and For The Period From
                August 9, 2001 (Inception) Through June 30, 2002
Common Stock         Common Stock Additional                       Total
                                                -------------------------- Subscription   Paid-in       Accumulated   Stockholder's
                                                   Shares        Amount     Receivable    Capital         Deficit        Deficit
                                                -----------   ------------   --------   ------------    ------------   ------------
Balance at August 9, 2001 (Inception)                    --   $         --   $     --   $        --     $         --   $         --

Issuance of common stock upon formation          61,280,000         61,280         --        (61,280)             --             --

Issuance of common stock at $0.08 per
share for the conversion of notes payable,
including accrued interest of $16,375             3,724,292          3,724         --        300,151              --        303,875

Issuance of common stock at $0.08
per share for note receivable                       612,800            613         --         49,387              --         50,000

Proceeds from the issuance of common
stock at $0.08 per share in connection with
the exercise of warrants                          3,724,292          3,724    (12,500)       298,744              --        289,968

Proceeds from the issuance of common stock
at $0.12 per share in connection with the
exercise of warrants                              6,177,024          6,177         --        750,004              --        756,181

Issuance of common stock in connection
with the merger with WIPC (including 18,400,000
shares issued to brokers)                        18,639,000         18,639         --        (18,639)             --             --

Issuance of common stock at $0.06 per share
for services                                      4,800,000          4,800         --        295,200              --        300,000

Issuance of common stock at $0.08 per share
for services                                      3,840,000          3,840         --        309,504              --        313,344

Estimated fair value of warrants granted
in connection with convertible debt                      --             --         --        287,500              --        287,500

Estimated fair value of options and
warrants granted for services                            --             --         --        813,525              --        813,525

Equity instruments subject to rescission                 --             --         --     (1,021,834)             --     (1,021,834)

Interest on equity instruments subject
to rescission                                            --             --         --        (12,137)             --        (12,137)

Net loss                                                 --             --         --             --      (2,406,580)    (2,406,580)
                                                -----------   ------------   --------   ------------    ------------   ------------
Balance at June 30, 2002 (as restated)          102,797,408   $    102,797   $(12,500)  $  1,990,125    $ (2,406,580)  $   (326,158)
                                                ===========   ============   ========   ============    ============   ============
Issuance of common stock at $0.91 for services        6,593              7         --          5,993              --          6,000

Issuance of common stock at $1.02 for services       32,862             33         --         33,486              --         33,519

Issuance of common stock at $1.04 for services       17,000             17         --         17,663              --         17,680

Issuance of common stock at $1.05 for services      207,142            207         --        217,292              --        217,499

Issuance of common stock at $1.17 for services      120,000            120         --        140,280              --        140,400

Issuance of common stock at $1.18 for services        6,667              7         --          7,860              --          7,867

Issuance of common stock at $1.20 for services       30,000             30         --         35,970              --         36,000

Issuance of common stock at $1.25 for services        8,500              9         --         10,616              --         10,625

Issuance of common stock at $1.40 for services       20,000             20         --         27,980              --         28,000

Issuance of common stock at  $0.00 per share
in connection with the cashless  exercises
of warrants                                         208,540            209         --           (209)             --             --

Proceeds from the issuance of common stock at
$0.06 per share in connection with the exercise
of warrants                                         911,954            912         --         56,201              --         57,113

Proceeds from the issuance of common stock at
$0.08 per share in connection with the exercise
of warrants                                         245,120            245         --         19,755              --         20,000

Proceeds from the issuance of common stock at
$0.12 per share in connection with the exercise
of warrants                                       2,828,272          2,828         --        343,113              --        345,941

Proceeds from the issuance of common stock at
$0.25 per share in connection with the
exercise of warrants                                200,000   $        200   $     --   $     49,800    $         --   $     50,000
SEE ACCOMPANYING NOTES TO THESE CONSOLIDATED FINANCIAL STATEMENTS ...CONTINUED

                                      F-21
Common Stock         Common Stock Additional                       Total
                                                -------------------------- Subscription   Paid-in       Accumulated   Stockholder's
                                                   Shares        Amount     Receivable    Capital         Deficit        Deficit
                                                -----------   ------------   --------   ------------    ------------   ------------
Proceeds from the issuance of common stock at
$0.06 per share for cash                            535,445   $        535   $     --   $     32,929    $         --   $     33,464

Proceeds from the issuance of common stock at
$0.12 per share for cash                          3,642,480          3,642         --        444,057              --        447,699

Proceeds from the issuance of common stock at
$0.25 per share for cash                            840,000            840         --        209,160              --        210,000

Proceeds from the issuance of common stock at
$0.30 per share for cash                             52,280             52         --         15,782              --         15,834

Proceeds from the issuance of common stock at
$0.40 per share for cash                             62,500             63         --         24,937              --         25,000

Proceeds from the issuance of common stock at
$0.47 per share for cash                             95,200             95         --         44,940              --         45,035

Proceeds from the issuance of common stock at
$0.50 per share for cash                             50,000             50         --         24,950              --         25,000

Proceeds from the issuance of common stock at
$0.95 per share for cash                             28,000             28         --         26,572              --         26,600

Commissions paid for fund raising activity               --             --         --       (281,944)             --       (281,944)

Beneficial conversion feature in connection
with the issuance of convertible debt                    --             --         --         50,000              --         50,000

Estimated fair value of warrants granted in
connection with note payable                             --             --         --         20,000              --         20,000

Estimated fair value of warrants granted
for services                                             --             --         --      1,839,000              --      1,839,000

Estimated fair value of options granted
for services                                             --             --         --        273,084              --        273,084

Liability incurred in connection with the
issuance of warrants                                     --             --         --       (113,750)             --       (113,750)

Equity instruments subject to rescission                 --             --         --     (3,185,309)             --     (3,185,309)

Interest on equity instruments subject to
rescission                                               --             --         --       (157,753)             --       (157,753)

Write off of subscriptions receivable                    --             --     12,500             --              --         12,500

Net loss                                                 --             --         --             --      (4,848,567)    (4,848,567)
                                                -----------   ------------   --------   ------------    ------------   ------------
Balance at June 30, 2003 (as restated)          112,945,963        112,946   $     --   $  2,222,580    $ (7,255,147)  $ (4,919,621)
                                                ===========   ============   ========   ============    ============   ============
Common stock issued for cash                      6,553,857          6,554         --        799,518              --        806,072

Common stock issued for services                     35,000             35         --         34,915              --         34,950

Proceeds from the issuance of common stock
in connection with the exercise of warrants      20,502,794         20,503         --      3,778,113              --      3,798,616

Estimated fair value of warrants
granted for services                                     --             --         --        786,000              --        786,000

Liability incurred in connection with the
issuance of warrants                                     --             --         --        (50,010)             --        (50,010)
....CONTINUED

SEE ACCOMPANYING NOTES TO THESE CONSOLIDATED FINANCIAL STATEMENTS

                                      F-22
Common Stock         Common Stock Additional                       Total
                                                -------------------------- Subscription   Paid-in       Accumulated   Stockholder's
                                                   Shares        Amount     Receivable    Capital         Deficit        Deficit
                                                -----------   ------------   --------   ------------    ------------   ------------
Estimated fair value of warrants granted
in connection with convertible debt                      --             --         --        362,800             --         362,800

Common stock issued in connection with
conversion of convertible debt and
accrued interest                                  3,881,250          3,881         --        772,369              --        776,250

Beneficial conversion feature in connection
with the issuance of convertible debt                    --             --         --      3,641,800              --      3,641,800

Issuance of common stock in connection
with cashless exercise of options                 6,030,307          6,030         --         (6,030)             --             --

Commissions paid for fund raising activity               --             --         --       (277,000)             --       (277,000)

Acquisition of Z Prompt                           8,533,000          8,533         --      1,804,729              --      1,813,262

Equity instruments subject to rescission                 --             --         --     (1,500,967)             --     (1,500,967)

Interest on equity instruments subject
to rescission                                            --             --         --       (322,000)             --       (322,000)

Net loss                                                 --             --         --             --     (15,379,253)   (15,379,253)
                                                -----------   ------------   --------   ------------    ------------   ------------
Balance at June 30, 2004                        158,482,171   $    158,482   $     --   $ 12,046,817    $(22,634,400)  $(10,429,101)
                                                ===========   ============   ========   ============    ============   ============
SEE ACCOMPANYING NOTES TO THESE CONSOLIDATED FINANCIAL STATEMENTS

                                      F-23
ACCUPOLL HOLDING CORP.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
       For The Years Ended June 30, 2004 and 2003, and For The Period From
                August 9, 2001 (Inception) Through June 30, 2002
YEAR ENDED      YEAR ENDED     PERIOD ENDED
Cash flows from operating activities:                                               JUNE 30, 2004   JUNE 30, 2003   JUNE 30, 2002
                                                                                                   (AS RESTATED)
                                                                                   ----------------------------------------------
Net loss                                                                       $(15,379,253)   $ (4,848,567)   $ (2,406,580)
     Adjustments to reconcile net loss to net cash used in
       operating activities:
         Depreciation and amortization                                                   245,408              --              --
         Loss on disposal of fixed assets                                                 12,640              --              --
         Estimated fair value of warrants granted in
            connection with notes payable                                                     --          20,000         287,500
         Estimated fair value of options and warrants
            granted for services                                                         786,000       2,112,084         813,525
         Estimated fair value of common stock issued
            for services                                                                  34,950         497,590         327,344
         Amortization of estimated fair value of warrants granted
            and beneficial conversion feature in connection with
            the issuance of convertible notes payable                                  4,054,600              --              --
         Convertible debt issued for services                                          1,276,000              --              --
         Loss on disposal of investment                                                1,200,000              --              --
         Impairment of goodwill                                                        2,542,752              --              --
         Accrued interest related to the conversion of notes payable                          --              --          16,375
         Write off of subscription receivable                                                 --          12,500              --
         Write off of prepaid consulting                                                      --         286,000              --
         Changes in operating assets and liabilities:
            Accounts receivable                                                         (209,939)             --              --
            Inventories                                                                  (73,300)             --              --
            Prepaid expenses                                                               2,500          (2,500)             --
            Other assets                                                                 128,996              --              --
            Accounts payable and accrued expenses                                        622,237         755,211         176,292
            Related party payables                                                       358,327          10,000         151,020
            Increase in capitalized software development costs                        (1,371,600)       (530,013)       (111,966)
                                                                                    ------------    ------------    ------------
     Net cash used in operating activities                                            (5,769,682)     (1,687,695)       (746,490)
                                                                                    ------------    ------------    ------------
Cash flows from investing activities:
     Increase in deferred acquisition costs                                                   --        (144,206)             --
     Purchases of property and equipment                                                 (11,135)             --              --
     Proceeds from related party note receivable                                              --         300,000        (300,000)
     Cash of acquired entity                                                               2,368              --              --
                                                                                    ------------    ------------    ------------
     Net cash provided by (used in) investing activities                                  (8,767)        155,794        (300,000)
                                                                                    ------------    ------------    ------------
Cash flows from financing activities:
     Proceeds from the issuance of notes payable to related parties                      210,950         175,000              --
     Principal payments of notes payable to related parties                             (195,000)             --              --
     Proceeds from issuance of convertible debt                                        1,528,600          50,000         287,500
     Borrowings on line-of-credit                                                         20,000              --              --
     Proceeds from the issuance of common stock                                          806,072         546,688              --
     Proceeds from issuance of common stock upon exercise of warrants, net             3,521,616         473,054       1,046,149
                                                                                    ------------    ------------    ------------

     Net cash provided by financing activities                                         5,892,238       1,244,742       1,333,649
                                                                                    ------------    ------------    ------------
Net increase (decrease) in cash                                                          113,789        (287,159)        287,159
Cash at beginning of period                                                                   --         287,159              --
                                                                                    ------------    ------------    ------------

Cash at end of period                                                               $    113,789    $         --    $    287,159
                                                                                    ============    ============    ============

Supplemental  disclosure of cash flow  information - Cash paid during the period
for:

         Interest (none paid in cash)                                               $         --    $         --    $         --
                                                                                    ============    ============    ============
         Income taxes                                                               $        800    $        800    $        800
                                                                                    ============    ============    ============
SUPPLEMENTAL  DISCLOSURE  OF NON-CASH  FINANCING AND  OPERATING  ACTIVITIES  See
accompanying  notes to the  consolidated  financial  statements for  information
relating to non-cash  investing  and  financing  activities  concerning  prepaid
consulting  fees,  issuance  of common  stock  related to  convertible  debt and
warrants,   issuance  of  preferred  stock,  increase  in  capitalized  software
development costs, beneficial conversion features and related party payables.

SEE ACCOMPANYING NOTES TO THESE CONSOLIDATED FINANCIAL STATEMENTS

                                      F-24
ACCUPOLL HOLDING CORP.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2004

NOTE 1 ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION

AccuPoll  Holding  Corporation,  a Nevada  corporation  (the "parent  company"),
principally operates through its wholly owned subsidiary  AccuPoll,  Inc., which
was incorporated on August 9, 2001 in Delaware. The parent company is engaged in
the design and  development  of a voting  system with an intuitive  touch-screen
interface (the "Voting System") that provides a polling place electronic  voting
solution  that  is  reliable,   accurate,   immediate,   secure,  easy  to  use,
confidential and auditable.  The Voting System has the ability to simultaneously
produce two  different  electronic  audit  trails  (recorded on both the polling
place administrative work station and the local voting station),  in addition to
generating  a  printed-paper  ballot.  The parent  company  completed  a reverse
acquisition  with a publicly  traded  company (see Note 2) in May 2002,  and its
common stock is quoted on the  Over-The-Counter  Bulletin Board under the symbol
"ACUP." For financial reporting purposes, the parent company was classified as a
development stage enterprise until November 2003.

PRINCIPLES OF CONSOLIDATION

                                     GENERAL

The accompanying  consolidated  financial statements include the accounts of the
parent company and its wholly-owned  subsidiary AccuPoll,  Inc. In addition, the
accounts of Z prompt, Inc. ("Z prompt"), a wholly-owned subsidiary, are included
in  such  financial   statements   from  November  1,  2003.   All   significant
inter-company balances and transactions have been eliminated in consolidation.

Except where the context requires otherwise, the entities named in the preceding
paragraph are hereinafter collectively referred to as the "Company."

                             BANKRUPTCY OF Z PROMPT

As  discussed  in Note 12, Z prompt filed  voluntary  bankruptcy  in March 2004.
Although  the  Company  is not  presently  a member of the  unsecured  creditors
committee  that was formed in connection  with the bankruptcy  proceedings,  the
Company is the single largest pre-petition creditor of Z prompt.

                                      F-25
In addition, as described in Note 6, the Company and certain of its officers and
principal  stockholders are presently  involved in civil litigation with certain
former stockholders and officers of Z prompt.  Management has determined that it
would not be meaningful to de-consolidate  the accounts of Z prompt at this time
because the Company (a) has a substantial  negative investment in Z prompt as of
June 30, 2004, and (b) expects to re-gain  control of this  subsidiary  based on
the   expectation   that  Z  prompt  will  be  able  to  negotiate  a  confirmed
reorganization  plan and emerge from bankruptcy by approximately  March of 2005.
See Note 3 for additional information regarding Z prompt.

                                AFFILIATED ENTITY

As further  explained  below in the "Variable  Interest  Entity" section of this
note,  the  accounts of affiliate  Web Tools  International,  Inc.  ("WTI") were
consolidated  with those of the Company as of January 1, 2004 in accordance with
Financial Accounting Standards Board ("FASB") Interpretation ("FIN") No. 46. For
reasons discussed in Note 5, WTI was de-consolidated as of April 1, 2004.

GOING CONCERN/LIQUIDITY CONSIDERATIONS

The Company has not generated  any revenues  from its Voting System  operations,
and there is no  assurance  of any future  revenues.  The Company  will  require
substantial  additional  funding  for  continuing  the  development,   obtaining
regulatory approval, and commercialization of its product. There is no assurance
that the Company will be able to obtain sufficient  additional funds when needed
or that such funds,  if available,  will be obtainable on terms  satisfactory to
the Company.

Management has taken actions to address these matters, which include:

o        Retention of experienced management personnel with particular skills in
         the commercialization of such products;

o        Attainment  of  technology  to develop  such  products  and  additional
         products; and

o        Raising  additional  funds  through  the  sale  of debt  and/or  equity
         securities.

Federal, State and various foreign government regulations govern the sale of the
Company's products.  There can be no assurance that the Company will receive the
regulatory approval required to market its proposed products.

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will  continue as a going  concern  which  contemplates,  among
other things,  the realization of assets and  satisfaction of liabilities in the
ordinary  course of business.  The Company has incurred  losses through June 30,
2004, has negative working capital at that date of  approximately  $6.8 million,
and has a lack of operational history which, among other factors,

                                      F-26
raise  substantial  doubt about its ability to continue as a going concern.  The
Company intends to fund operations through sales of the Voting System, but there
is no  commitment  by any  entities  for  the  purchase  of any of the  proposed
products.  In the absence of significant sales and profits, the Company may seek
to raise additional funds to meet its working capital  requirements through debt
and/or   equity   financing   arrangements.   Management   believes   that  such
arrangements,  combined with the net proceeds from the transaction  described in
Note 18, will be sufficient to fund the Company's capital expenditures,  working
capital needs and other cash requirements for the year ending June 30, 2005. The
successful  outcome of future  activities cannot be determined at this time, and
there is no assurance that, if achieved,  the Company will have sufficient funds
to execute its intended business plan or generate positive operating results.

These circumstances, combined with the potential liability described in Note 10,
raise  substantial  doubt  about the  Company's  ability to  continue as a going
concern. The accompanying  consolidated  financial statements do not include any
adjustments that might result from the outcome of this uncertainty.

OTHER RISKS AND UNCERTAINTIES

The  Company  intends  to  operate  in an  industry  that is  subject to intense
competition,  government  regulation  and  technological  change.  The Company's
operations  are  subject  to  significant  risks  and  uncertainties   including
financial,  operational,  technological,  regulatory and other risks  associated
with an emerging business, including the potential risk of business failure.

From time to time, the Company  maintains cash balances at certain  institutions
in excess of the FDIC limit of $100,000.

USE OF ESTIMATES

The Company  prepares its consolidated  financial  statements in conformity with
accounting  principles  generally  accepted  in the  United  States  of  America
("GAAP"), which require 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 reported
amounts of  revenues  and  expenses  during the  reporting  period.  Significant
estimates made by management include  realization of long-lived  assets,  equity
instruments subject to rescission,  valuation of stock options and warrants, and
the continued consolidation of a wholly-owned  subsidiary in bankruptcy.  Actual
results could differ from those estimates.

SOFTWARE DEVELOPMENT COSTS

In accordance with Statement of Financial  Accounting  Standards ("SFAS") No. 86
"Accounting for the Costs of Computer Software to be Sold,  Leased, or Otherwise
Marketed,"

                                      F-27
the Company capitalizes certain costs related to the development of new software
products or the enhancement of existing  software  products for sale or license.
These  costs  are  capitalized  from  the  point  in  time  that   technological
feasibility  has been  established,  as evidenced by a working model or detailed
working-program  design to the point in time that the product is  available  for
general  release  to  customers.  Capitalized  software  development  costs  are
amortized on a straight-line  basis over the three-year  estimated economic life
of the products,  beginning (as applicable)  with the general product release to
customers or when the Voting System  qualified under certain federal  standards.
Research and  development  costs  incurred prior to  establishing  technological
feasibility  and  costs  incurred  subsequent  to the  events  described  in the
preceding sentence are charged to expense as incurred.

The Company periodically evaluates whether events or circumstances have occurred
that  indicate  that the  remaining  useful  lives of the  capitalized  software
development costs should be revised or that the remaining balance of such assets
may not be recoverable.  At June 30, 2004, management believes that no revisions
to the remaining useful lives or write-down of capitalized  software development
costs are  required.  The Company  began  amortizing  its  capitalized  software
development costs in April 2004,  following the March 2004  qualification of its
Voting System as complying with certain federal voting system standards; at June
30, 2004, accumulated amortization approximated $ 230,000.

FAIR VALUE OF FINANCIAL INSTRUMENTS

SFAS No. 107, "Disclosures About Fair Value of Financial  Instruments," requires
disclosure of fair value  information  about  financial  instruments  when it is
practicable  to  estimate  that  value.  The  carrying  amount of the  Company's
accounts payable and accrued expenses  approximates  their estimated fair values
due to the short-term maturities of those financial instruments.  In the opinion
of management, the fair value of payables to related parties cannot be estimated
without incurring excessive costs; for that reason, the Company has not provided
such disclosure.  Other information about related-party liabilities (such as the
carrying  amount,  the interest rate, and the maturity date) is provided,  where
applicable, elsewhere in these notes to consolidated financial statements.

STOCK-BASED COMPENSATION

The Company accounts for stock-based  compensation issued to employees using the
intrinsic  value based  method as  prescribed  by  Accounting  Principles  Board
Opinion No. 25 ("APB 25"), "Accounting for Stock Issued to Employees." Under the
intrinsic value based method,  compensation  is the excess,  if any, of the fair
value of the stock at the grant date (or other measurement date) over the amount
an employee must pay to acquire the stock.  Compensation,  if any, is recognized
over the applicable service period, which is usually the vesting period.

                                      F-28
SFAS No. 123,  "Accounting  for  Stock-Based  Compensation,"  if fully  adopted,
changes the method of accounting for employee  stock-based  compensation  to the
fair value based method. In addition,  under this pronouncement,  the fair value
of options and warrants  issued to  non-employees  is estimated  using an option
pricing  model that takes into  account the stock  price at the grant date,  the
exercise price, the expected life of the equity instrument,  and the annual rate
of quarterly  dividends.  Compensation  expense,  if any, is recognized over the
applicable service period, which is usually the vesting period.

FIN No. 44, "Accounting for Certain  Transactions  Involving Stock Compensation,
an  Interpretation  of APB 25," clarifies the  application of APB 25 for (a) the
definition of  "employee"  for purposes of applying APB 25, (b) the criteria for
determining  whether  a plan  qualifies  as a  non-compensatory  plan,  (c)  the
accounting  consequences of various  modifications  to the terms of a previously
fixed  stock  option or  award,  and (d)  accounting  for an  exchange  of stock
compensation  awards in a business  combination.  Management  believes  that the
Company accounts for transactions involving stock-based employee compensation in
accordance with FIN No. 44.

SFAS  No.  148,  "Accounting  for  Stock-Based  Compensation  -  Transition  and
Disclosure,  an  amendment  of SFAS  123," was  issued in  December  2002 and is
effective for fiscal years ended after December 15, 2002.  SFAS No. 148 provides
alternative  methods  of  transition  for a  voluntary  change to the fair value
method of accounting for stock-based employee  compensation.  In addition,  this
Statement  amends  the  disclosure  requirements  of  SFAS  No.  123 to  require
prominent  disclosure in both annual and interim financial  statements about (a)
the method of  accounting  for  stock-based  employee  compensation  and (2) the
effect of the method used on reported results.

The  adoption of the  accounting  methodology  of SFAS No. 123 is  optional  for
stock-based  employee  compensation,  and the  Company  has  elected to continue
accounting  for options  issued to employees  using APB 25.  However,  pro forma
disclosures, as if the Company adopted the cost recognition requirements of SFAS
No. 123, are required to be presented.

At June 30, 2004, the Company has no stock-based  employee  compensation  plans;
however,  there have been  non-plan  options  granted by the  Company to certain
employees.  There is no stock-based  employee  compensation expense reflected in
net loss for fiscal  2004,  fiscal  2003,  or for the period from August 9, 2001
(Inception)  through June 30, 2002 because  options  granted to employees had an
exercise  price  equal to or  greater  than the market  value of the  underlying
common stock on the grant date. The following  table  illustrates  the effect on
net loss and loss per common  share if the  Company  had  applied the fair value
recognition provisions of SFAS 123 to stock-based employee compensation.

                                      F-29
PERIODS ENDED JUNE 30,
                                                2004            2003            2002
                                           ------------    ------------    ------------
Net loss attributable to common
    stockholders *                         $(15,701,253)   $ (5,006,567)   $ (2,418,717)
Add: total stock-based employee
     compensation expense determined
     under fair value based method
     for all awards                          (1,421,100)       (598,230)        (68,340)
                                           ------------    ------------    ------------
    Pro-forma                              $(17,122,353)   $ (5,604,797)   $ (2,487,057)
                                           ============    ============    ============
Basic and diluted loss per common share:
    As reported                            $      (0.12)   $      (0.05)   $      (0.04)
                                           ============    ============    ============
    Pro-forma                              $      (0.13)   $      (0.05)   $      (0.04)
                                           ============    ============    ============
* These amounts include interest related to certain equity  instruments  subject
to rescission (see Note 10).

BENEFICIAL CONVERSION FEATURE

The  convertible  feature of a note  payable (see Note 4) provides for a rate of
conversion that is below market value. This feature is normally characterized as
a beneficial conversion feature ("BCF").  Pursuant to Emerging Issues Task Force
("EITF") Issue No. 98-5 ("EITF 98-5"),  "Accounting For  Convertible  Securities
with  Beneficial  Conversion  Features  or  Contingently  Adjustable  Conversion
Ratio," and EITF Issue No. 00-27, "Application of EITF Issue No. 98-5 To Certain
Convertible  Instruments,"  the Company has estimated the fair value of such BCF
to approximate  $50,000 for the year ended June 30, 2003 and none for the period
ended June 30, 2002.

In connection with its fiscal 2004 borrowings  under several  convertible  notes
payable,  the Company  recorded and amortized BCFs of  approximately  $3,640,000
(including  the  transactions  described  in Notes 4, 13 and 14) during the year
ended June 30, 2004.

INVENTORIES

Inventories  are stated at the lower of cost or  estimated  market,  and consist
entirely of finished  goods (Voting  System  machines).  Cost is determined on a
weighted average basis that approximates the first-in,  first-out method. Market
is estimated by comparison with recent  purchases or net realizable  value.  The
net realizable  value is estimated based on  management's  forecast for sales of
the Company's  products or services in the ensuing years.  The industry in which
the Company operates is  characterized by technological  advancement and change.
Should demand for the Company's  products  prove to be  significantly  less than
anticipated,  the ultimate  realizable value of the Company's inventory could be
substantially  less  than  the  amount  shown in the  accompanying  consolidated
balance sheets.

                                      F-30
REVENUE RECOGNITION

The Company  records  sales when goods are  shipped to the  customer or upon the
completion  of the service.  Amounts  received  prior to the  completion  of the
earnings process, such as maintenance contracts paid in advance, are included in
deferred revenues in the accompanying consolidated balance sheets.

The Securities and Exchange  Commission (the "SEC") has issued Staff  Accounting
Bulletin No. 104 ("SAB 104"),  "Revenue  Recognition,"  which outlines the basic
criteria  that  must be met to  recognize  revenue  and  provides  guidance  for
presentation  of revenue  and for  disclosures  related  to revenue  recognition
policies in financial  statements filed with the SEC.  Management  believes that
the Company's revenue recognition accounting policy conforms to SAB 104.

INDEFINITE-LIFE INTANGIBLE ASSETS

Goodwill  represents  the excess of the purchase  price over the estimated  fair
value  of  identifiable  net  assets  acquired.  The  Company  has  applied  the
provisions  of  SFAS  No.  142,  "Goodwill  and  Other  Intangible  Assets,"  in
accounting  for  goodwill.  SFAS  No.  142  requires  that  goodwill  and  other
intangible  assets that have indefinite  lives not be amortized,  but instead be
tested at least annually for impairment when events or changes in  circumstances
indicate  that the  asset  might be  impaired.  For  indefinite-life  intangible
assets, impairment is tested by comparing the carrying value of the asset to the
estimated  fair  value of the  reporting  unit to which they are  assigned.  The
Company recorded an impairment charge approximating  $2,543,000 to write-off all
of the goodwill associated with the acquisition of Z Prompt described in Note 3.

IMPAIRMENT OF LONG LIVED-ASSETS

The Company  periodically  evaluates the carrying value of its long-lived assets
under the provisions of SFAS No. 144, "Accounting for the Impairment or Disposal
of Long-Lived Assets." SFAS No. 144 addresses financial accounting and reporting
for the impairment or disposal of long-lived assets, and supersedes (a) SFAS No.
121,  "Accounting  for the  Impairment of Long-Lived  Assets and for  Long-Lived
Assets to be Disposed Of," and (b) the  accounting  and reporting  provisions of
APB Opinion  No. 30  ("Reporting  the Effects of the  Disposal of a Segment of a
Business,  and  Extraordinary,  Unusual and  Infrequently  Occurring  Events and
Transactions") for the disposal of a segment of a business as previously defined
in that Opinion.  SFAS No. 144 also amends Accounting  Research Bulletin ("ARB")
No. 51,  "Consolidated  Financial  Statements,"  to eliminate  the  exception to
consolidation of a subsidiary when control is likely to be temporary.

SFAS No. 144 requires impairment losses to be recorded on long-lived assets used
in  operations,  including  amortizable  intangible  assets when  indicators  of
impairment are present. Indicators of impairment include an economic downturn or
a change in the assessment of

                                      F-31
future  operations.  In the event a condition is identified that may indicate an
impairment  issue, an assessment is performed using a variety of  methodologies,
including  analysis  of  undiscounted  future  cash  flows,  estimates  of sales
proceeds and independent  appraisals.  If such assets are impaired,  the expense
recognized  is the amount by which the carrying  amount of the asset exceeds the
estimated fair value.  Assets to be disposed of are reported at the lower of the
carrying value or the estimated fair market value, less cost to sell.

On March  31,  2004,  the  Company's  wholly-owned  subsidiary  Z  prompt  filed
bankruptcy (see Note 12). In connection with the bankruptcy  filing, the Company
recorded an impairment charge  approximating  $2,543,000 to write-off all of the
goodwill associated with the acquisition of this subsidiary (see Note 3).

INCOME TAXES

Deferred income taxes reflect the estimated tax effect of temporary  differences
between the carrying  amounts of assets and liabilities for financial  reporting
purposes and the amounts reported for income tax purposes. The Company records a
valuation  allowance for deferred tax assets when,  based on  management's  best
estimate of taxable income (if any) in the foreseeable future, it is more likely
than not that some portion of the deferred tax assets may not be realized.

ADVERTISING

The Company  expenses the cost of advertising as incurred.  Advertising  expense
approximated  $170,000,  $310,000, and $90,000 for the years ended June 30, 2004
and 2003 and for the period from  August 9, 2001  (Inception)  through  June 30,
2002, respectively.

RESEARCH AND DEVELOPMENT

Certain expenditures for research and development activities relating to product
development  and   improvement   are  charged  to  expense  as  incurred.   Such
expenditures  approximated  $175,000 for the period  August 9, 2001  (Inception)
through June 30, 2002.  There were no such  expenditures for the year ended June
30, 2003. The Company  incurred  approximately  $137,000 for  development of its
products during fiscal 2004.

                                      F-32
LOSS PER COMMON SHARE

Under SFAS No. 128,  "Earnings per Share," basic  earnings per share is computed
by dividing net income available to common shareholders by the  weighted-average
number  of  common  shares  assumed  to be  outstanding  during  the  period  of
computation.  Diluted  earnings  per common  share is computed  similar to basic
earnings per common share,  except that the  denominator is increased to include
the number of additional  common shares that would have been  outstanding if the
potential  common shares had been issued and the  additional  common shares were
dilutive (approximating  75,000,000,  31,700,000,  and 28,200,000 shares at June
30, 2004,  2003 and 2002,  respectively),  based on the treasury  stock  method.
Because the Company has incurred  net losses,  basic and diluted loss per common
share  are  equal   because   additional   potential   common  shares  would  be
anti-dilutive.

                                                PERIODS ENDED JUNE 30,
                                        2004            2003            2002
                                  -------------   -------------   -------------
Net loss, as reported             $ (15,379,253)  $  (4,848,567)  $  (2,406,580)
Interest related to equity
    instruments subject to
     rescission                        (322,000)       (158,000)        (12,137)
                                  -------------   -------------   -------------
Net loss available to common
     stockholders                 $ (15,701,253)  $  (5,006,567)  $  (2,418,717)
                                  =============   =============   =============
Shares used to compute
     basic and diluted loss
     per common share:
   Weighted-average common shares   130,782,481     106,687,447      68,735,272
                                  =============   =============   =============
Basic and diluted loss per
   common share                   $       (0.12)  $       (0.05)  $       (0.04)
                                  =============   =============   =============

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

SFAS No. 133, "Accounting For Derivative Instruments and Hedging Activities" (as
amended by SFAS Nos.  137, 138, 140, 141 and 145),  establishes  accounting  and
reporting  standards for derivative  instruments,  including certain  derivative
instruments embedded in other contracts, and for hedging activities. It requires
that an entity  recognize all derivatives as either assets or liabilities on the
balance  sheet at their fair value.  The Company has no  derivatives  or hedging
activities as of June 30, 2004 or June 30, 2003.

                                      F-33
COMPREHENSIVE INCOME

SFAS No. 130, "Reporting  Comprehensive  Income,"  establishes the standards for
reporting and display of  comprehensive  income and its components in a full set
of  general-purpose  financial  statements.  The  adoption  of SFAS  130 has not
materially impacted the Company's financial position or results of operations.

SEGMENT INFORMATION

SFAS 131, "Disclosures about Segments of an Enterprise and Related Information,"
changed the way public  companies  report  information  about  segments of their
business  in their  annual  financial  statements  and  requires  them to report
selected segment  information in their quarterly reports issued to shareholders.
It also  requires  entity-wide  disclosures  about the  products and services an
entity provides,  the foreign countries in which it holds significant assets and
its major  customers.  At June 30, 2004 and 2003,  the  Company  operates in one
segment, as disclosed in the accompanying consolidated statements of operations.

VARIABLE INTEREST ENTITY

In January 2003, the FASB issued FIN No. 46, "Consolidation of Variable Interest
Entities, an Interpretation of ARB 51." The primary objectives of FIN No. 46 are
to provide  guidance  on the  identification  of entities  for which  control is
achieved through means other than voting rights (variable interest entities,  or
"VIEs"), and how to determine when and which business enterprise (if any) should
consolidate the VIE. This new model for  consolidation  applies to an entity for
which  either:  (a) the equity  investors  do not have a  controlling  financial
interest;  or (b) the equity  investment at risk is insufficient to finance that
entity's activities without receiving additional  subordinated financial support
from other  parties.  In  addition,  FIN No. 46  requires  that both the primary
beneficiary and all other enterprises with a significant  variable interest in a
VIE make  additional  disclosures.  As amended in December  2003,  the effective
dates  of FIN No.  46 for the  Company  are as  follows:  (a) For  interests  in
special-purpose  entities:  the first period ended after  December 15, 2003; and
(b) For all other types of VIEs: the first period ended after March 15, 2004.

The Company is associated with WTI through common ownership; in addition,  until
April 2004 the Company  was a major  customer  of WTI for  software  development
services.  (WTI derived approximately 75% and 98% of their revenue from services
provided to the  Company  for the year ended June 30, 2003 and the seven  months
ended January 31, 2004,  respectively.)  Based on these and other  factors,  the
Company  determined  that, as of January 1, 2004,  (i) WTI is a VIE and (ii) the
Company was its primary beneficiary.  Therefore,  effective January 1, 2004, the
accounts  of WTI were  consolidated  with  those  of the  Company.  For  reasons
explained in Note 5, the accounts of WTI were de-consolidated effective April 1,
2004.

                                      F-34
SIGNIFICANT RECENT ACCOUNTING PRONOUNCEMENTS

In April 2003,  the FASB issued SFAS No. 149,  "Amendments  of Statement  133 on
Derivative  Instruments  and Hedging  Activities,"  which  amends and  clarifies
financial accounting and reporting for derivative instruments, including certain
derivative  instruments  embedded in other contracts and for hedging  activities
under SFAS No. 133. This  pronouncement is effective for contracts  entered into
or  modified  after June 30,  2003 (with  certain  exceptions),  and for hedging
relationships  designated  after June 30, 2003. The adoption of SFAS No. 149 did
not have a material impact on the Company's consolidated financial statements.

In May 2003,  the FASB issued SFAS No. 150,  "Accounting  for Certain  Financial
Instruments with  Characteristics  of both Liabilities and Equity." SFAS No. 150
establishes  standards  for  how  a  company  classifies  and  measures  certain
financial  instruments with  characteristics of both liabilities and equity, and
is effective for public  companies as follows:  (i) in November  2003,  the FASB
issued  FASB Staff  Position  ("FSP") FAS 150-03  ("FSP  150-3"),  which  defers
indefinitely (a) the measurement and classification guidance of SFAS No. 150 for
all  mandatorily  redeemable   non-controlling  interests  in  (and  issued  by)
limited-life  consolidated  subsidiaries,  and (b)  SFAS No.  150's  measurement
guidance for other types of mandatorily  redeemable  non-controlling  interests,
provided  they  were  created  before  November  5,  2003;  (ii)  for  financial
instruments  entered  into or  modified  after May 31, 2003 that are outside the
scope of FSP 150-3; and (iii)  otherwise,  at the beginning of the first interim
period  beginning  after June 15, 2003. The Company  adopted SFAS No. 150 on the
aforementioned  effective dates. The adoption of this pronouncement did not have
a material impact on the Company's results of operations or financial condition.

In  December  2003,  the FASB  issued a  revision  of SFAS No.  132,  EMPLOYERS'
DISCLOSURES ABOUT PENSIONS AND OTHER POSTRETIREMENT BENEFITS. This pronouncement
("SFAS No. 132-R") expands employers'  disclosures about pension plans and other
post-retirement  benefits, but does not change the measurement or recognition of
such plans  required by SFAS No. 87, No. 88, or No. 106.  SFAS No. 132-R retains
the existing  disclosure  requirements  of SFAS No. 132,  and  requires  certain
additional  disclosures about defined benefit  post-retirement  plans. Except as
described in the  following  sentence,  SFAS No. 132-R is effective  for foreign
plans for fiscal years ending after June 15,  2004;  after the  effective  date,
restatement  for some of the new  disclosures  is required  for  earlier  annual
periods. Some of the interim-period disclosures mandated by SFAS No. 132-R (such
as the components of net periodic benefit cost, and certain key assumptions) are
effective  for foreign  plans for quarters  beginning  after  December 15, 2003;
other interim-period  disclosures will not be required for the Company until the
first  quarter of 2005.  Since the  Company  does not have any  defined  benefit
post-retirement  plans,  the  adoption  of this  pronouncement  did not have any
impact on the Company's results of operations or financial condition.

                                      F-35
Other significant recent accounting pronouncements issued by the FASB (including
its Emerging  Issues Task Force),  the  American  Institute of Certified  Public
Accountants,  and  the  SEC  are  discussed  elsewhere  in  these  notes  to the
consolidated  financial  statements.  In the opinion of management,  significant
recent accounting  pronouncements  did not or will not have a material effect on
the consolidated financial statements, other than FIN No. 46 as discussed above.

STOCK DIVIDEND

Effective  July 18, 2002,  the  Company's  Board of  Directors  approved a stock
dividend that was accounted for as a  four-for-one  stock split.  All references
throughout these  consolidated  financial  statements and notes to the number of
shares,  per share amounts,  stock  options,  and market prices of the Company's
common stock have been restated to reflect such stock dividend.

EQUITY INSTRUMENTS SUBJECT TO RESCISSION

The Company  accounts for common stock and other equity  instruments that may be
subject  to  rescission  claims at  estimated  fair value  (based on  applicable
measurement criteria) in accordance with the SEC's promulgated  accounting rules
and interpretive  releases.  Since equity instruments  subject to rescission are
redeemable at the holder's  option or upon the occurrence of an uncertain  event
not solely within the Company's control, such equity instruments are outside the
scope  of  SFAS  No.  150 and  its  related  interpretations.  Under  the  SEC's
interpretation  of GAAP,  reporting such claims outside of stockholders'  equity
(as  "mezzanine  equity") is required,  regardless of how remote the  redemption
event may be.

RESTATEMENTS AND RECLASSIFICATIONS

As previously  reported,  the accompanying  June 30, 2003  consolidated  balance
sheet has been restated to reflect equity instruments subject to rescission, and
the  financial  statements  described in Note 11 have been restated as explained
therein.  All  financial  information  included in these  notes to  consolidated
financial  statements  that relates to the quarters ended September 30, 2003 and
December  31, 2003  reflects  (a) the  applicable  adjustments  described in the
amended Form 10-Q's for such  periods,  and (b) the  restatement  of the balance
sheets as of those dates to reflect equity instruments subject to rescission. In
addition,  all  financial  information  included in these notes to  consolidated
financial  statements  for the first  three  quarters  of  fiscal  2003 has been
adjusted as described in Note 9.

As of the effective  date of SFAS No. 150 (see above),  management  reclassified
the June 30, 2003 balance (approximately  $114,000) of the put liability related
to warrant  issuances from  "mezzanine  equity" to the liability  section of the
Company's consolidated balance sheet.

                                      F-36
Certain  reclassifications  have  been  made  to the  2003  and  2002  financial
statement presentation to conform to the current year's presentation.

NOTE 2 REVERSE ACQUISITION

On May 20, 2002, Western  International Pizza Corporation  ("WIPC"),  a publicly
traded  company,   entered  into  a  Stock  Exchange  Agreement  (the  "Exchange
Agreement")  with AccuPoll,  Inc ("AccuPoll") in a tax-free share exchange under
Section  368(a)(1)(B)  of  the  Internal  Revenue  Code.  Such  transaction  was
accounted for as a reorganization.  In May 2002, pursuant to a Certificate filed
with the Nevada  Secretary of State,  WIPC effected a one for 2000 reverse split
of all the outstanding shares of its common stock. Thereafter, in May 2002, WIPC
effected  a 1 for 5 reverse  stock  split of all the  outstanding  shares of its
common stock. Pursuant to the Exchange Agreement,  all of the outstanding common
and preferred  stock and  outstanding  warrants of AccuPoll  were  exchanged for
shares of WIPC on a 1 for 1.532  basis.  By  virtue of the  reorganization,  the
stockholders of AccuPoll acquired 75,500,000 restricted common shares of WIPC.

Management  accounted for the  reorganization  as a capital  stock  transaction.
Accordingly,  the  reorganization  was  reported  as a  recapitalization  of the
Company and AccuPoll is considered the acquirer for accounting purposes. Through
its former  stockholders,  the  Company is deemed the  acquirer  for  accounting
purposes because of (a) its majority  ownership of WIPC, (b) its  representation
on WIPC's board of directors, and (c) the executive management positions held by
former officers of AccuPoll.

In  connection  with the reverse  acquisition,  the  Company  issued 4.8 million
shares of restricted  common stock at $0.06 per share  (estimated to be the fair
value of the services  rendered) to a broker.  The related $300,000 was expensed
during the period ended June 30, 2002.

NOTE 3 PURCHASE OF BUSINESS

On April 9,  2003,  the  Company  entered  into an  agreement  with Z prompt  (a
California  corporation) to purchase all of the  outstanding  capital stock of Z
prompt from its  stockholders  in exchange for 8 million shares of the Company's
restricted  common stock.  The primary reason for this purchase was to acquire a
nationwide network of qualified  computer hardware  technicians who could assist
with the  maintenance of the AccuPoll  Ballot Buddy product -  specifically  its
integrated printer.

Additionally,  the Company was required to settle an outstanding promissory note
of Z prompt in the principal amount of approximately $400,000 that was held by a
former  stockholder  of Z prompt,  in exchange for 533,000  shares of restricted
common  stock of the  Company.  The  Company  advanced  Z  Prompt  approximately
$144,000 in connection with the acquisition; such

                                      F-37
advances were initially  recorded as deferred  acquisition  costs because of the
contingency described in the following paragraph.

The agreement between AccuPoll and the Z prompt  stockholders  provided that the
transaction could be rescinded by the former Z prompt shareholders if AccuPoll's
electronic  voting  system was not certified by Wyle Labs by September 30, 2003.
Such certification was obtained on October 31, 2003;  accordingly,  the Z prompt
acquisition was recorded for accounting purposes in November 2003.

Based on an independent valuation, the estimated fair value of AccuPoll's common
stock issued for the Z prompt acquisition  approximated $1.8 million ($0.213 per
common share).  Among other factors,  the valuation  utilized  information  from
then-recent   issuances  of  the  Company's   common  stock  in   equity-raising
transactions.

The purchase price was allocated to the business acquired based on the estimated
fair value of the assets acquired and liabilities assumed, as follows:

                        Assets        $   183,329
                        Goodwill        2,542,752
                        Liabilities      (912,819)
                                      -----------
                                      $ 1,813,262
                                      ===========

The  results  of  operations  of Z  prompt  are  included  in  the  accompanying
consolidated financial statements from November 1, 2003. The following pro forma
summary presents condensed consolidated results of operations as if Z prompt had
been acquired as of the beginning of the years ended June 30, 2004 and 2003:

                             YEAR ENDED JUNE 30
                            2004           2003
                        -------------   -------------
Net loss                $(14,043,675)   $ (5,761,013)
                        =============   =============
Loss per common share   $      (0.11)   $      (0.05)
                        =============   =============

The above amounts are based upon certain  assumptions  and estimates,  which the
Company  believes are  reasonable.  The pro forma  results of  operations do not
purport to necessarily be

                                      F-38
indicative  of the  results  which  would have been  obtained  had the  business
combination  occurred as of the beginning of the aforementioned  years, or which
may be obtained in fiscal 2005 and thereafter.

See Notes 6 and 12 for additional information related to Z Prompt.

NOTE 4 CONVERTIBLE NOTE PAYABLE

We have a  convertible  debenture  which at the  discretion  of the  convertible
debenture grantor (the "Grantor") may provide us loans of up to $1,250,000.  The
convertible  debenture  bears  interest at an annual rate of 10% and  originally
matured on June 30,  2004,  but has been  extended to  December  31,  2004.  The
debenture is  convertible on ninety days written notice by Grantor at the lesser
of (i) 50% of the average three lowest  closing  prices for our common stock for
the twenty days  immediately  preceding the  conversion  date or (ii) $0.625 per
share.  At June 30, 2004,  we had borrowed  $872,000  under such  debenture.  In
connection  with such  borrowing,  the  Company  granted a warrant  to  purchase
6,400,000 shares of the Company's  restricted  common stock at an exercise price
of $0.06 per common  share.  The  warrant  vested upon grant and expires in July
2008.  The  Company  recorded  the  relative  fair value of the  warrant and the
beneficial  conversion  feature  as a debt  discount  in  the  total  amount  of
approximately  $200,000.  The  discount  associated  with the  warrant  is being
amortized to interest  expense over the term of the related  debt.  The discount
associated with the beneficial  conversion  feature was  insignificant,  and was
recorded as interest expense upon issuance.

In November  2003,  the Company  issued an additional  warrant to the Grantor to
purchase  6  million  shares  of the  Company's  restricted  common  stock at an
exercise price of $0.06 per share in connection  with a deferral of the maturity
date of the above  convertible  debt instrument to December 2004 and an increase
of the available  borrowings to $1,250,000 from the original amount of $600,000.
The warrant vested upon grant and expires in October 2008. The Company  recorded
the relative fair value of the warrant,  which approximated  $40,000,  as a debt
discount which is being amortized to interest  expense over the extended term of
the convertible debenture.

See Notes 13 and 14 for other convertible notes payable.

NOTE 5 RELATED PARTY TRANSACTIONS

RELATED PARTY PAYABLES

Related party payables approximated $1,487,000 and $875,000 at June 30, 2004 and
2003, respectively, which represent expenses incurred by the Company relating to
the management services agreement entered into with WTI (see below). The amounts
bear no interest and are due within thirty days of receipt.

NOTES PAYABLE TO RELATED PARTIES

During the year ended June 30,  2003,  the  Company  borrowed  an  aggregate  of
$165,000 for working capital  purposes from a related party.  The note calls for
interest at 8% and is due on demand. Per the note agreement,  the Company issued
the creditor  warrants (with an estimated  value of $20,000) to purchase  40,000
shares of restricted  common stock of the Company.  At June 30, 2004,  this note
was paid in full.

                                      F-39
MASTER SERVICES AGREEMENT

In April  2002,  the  Company  entered  into a Master  Services  Agreement  (the
"Services  Agreement")  whereby WTI provided  substantially  all  non-production
services related to the Company's Voting System.  Under the Services  Agreement,
the Company was  charged  hourly  rates for the  services of WTI  employees  who
worked on developing the computer  software for the Company's Voting System.  In
addition,  the Company paid WTI for all reimbursable expenses, as defined in the
Services Agreement.  The Company was not charged for the use of the office space
or fixed  assets of WTI;  overhead-related  charges  were  included in the basic
hourly rates charged by WTI to the Company. All inventions,  concepts, know-how,
methodologies,  processes, algorithms,  techniques,  compilations,  software and
other works of authorship  of any nature  created or developed by WTI during the
life of the Services Agreement remain the exclusive property of AccuPoll.

WTI, which was incorporated in 1996, is in the business of software  engineering
in various computer languages with an emphasis on Linux/Apache, Sun Solaris, and
Microsoft  NT/Win2K  platforms.  WTI is owned and operated by Dennis  Vadura and
Frank Wiebe. Mr. Vadura is the Company' chief executive officer, a director, and
a principal  stockholder;  Mr. Wiebe is the Company's president and treasurer, a
director,   and  a  principal   stockholder   (collectively   the   "controlling
stockholders").  During the years  ended June 30,  2004 and 2003,  WTI  invoiced
approximately $1,450,000 and $1,300,000,  respectively, to the Company under the
terms of the Services Agreement,  of which  approximately  $1,487,000 is due and
payable at June 30, 2004.

The Services  Agreement  expired on March 31, 2004. Since that date, the Company
has not used the services of WTI because the  software for the Voting  System is
now  substantially  complete;  any additional  computer  programming that may be
necessary  will be  provided by Company  employees  (some of whom are former WTI
employees).  At this time, WTI is virtually a dormant entity with just two minor
customers and only a few employees. Although the Company's June 30, 2004 payable
to WTI is a substantial amount (see the preceding paragraph), there is no intent
to pay this liability in the foreseeable future. Given its minimal operations at
this time, management believes that WTI is no longer dependent for its continued
existence upon additional subordinated financial support from the Company or its
controlling stockholders.  For these reasons,  management has concluded that the
Company  is no  longer  the  primary  beneficiary  of WTI  and,  therefore,  has
de-consolidated the accounts of WTI as of April 1, 2004.

                                      F-40
NOTE 6 OTHER COMMITMENTS AND CONTINGENCIES

CONSULTING AGREEMENTS

In April 2002, the Company issued  consultants  3,840,000 shares of common stock
at $0.08 per share, valued at $313,344 (based on the market value on the date of
grant), of which $286,000 was included in the June 30, 2002 consolidated balance
sheet as prepaid  consulting  fees and  $27,344 was  expensed  during the period
ended June 30, 2002. The related consulting services were to be provided through
April 2004, and the Company was amortizing the prepaid  consulting fees over the
service period on a straight-line  basis. As part of the same  transaction,  the
Company granted  warrants to purchase 2 million shares of its restricted  common
stock at an exercise price of $0.06 per share,  valued at $500,000 (based on the
Black-Scholes  pricing  model) to such  consultants as a  non-refundable  fee in
exchange for general business consulting services, which the Company recorded in
the accompanying  consolidated statement of operations for the period ended June
30, 2002. During the year ended June 30, 2003, the Company  determined it was no
longer receiving benefit from the consultant and expensed the remaining $286,000
in the accompanying consolidated statement of operations for the year ended June
30, 2003.

LITIGATION

Z prompt

In October  2003, a former  officer and principal  stockholder  of Z prompt (the
"plaintiff")  filed a lawsuit  against  the  Company  and Z prompt  (hereinafter
collectively  referred  to as the  "defendants")  alleging  breach of  contract,
conversion, and fraud relating to (a) the plaintiff's employment contract with Z
prompt,  (b) the merger  agreement  described  in Note 3,  and/or (c) a Z prompt
promissory note (approximately $167,000 plus interest) payable to the plaintiff.
The plaintiff is seeking minimum compensatory damages (including deferred salary
and  collection  of the  promissory  note) of  approximately  $1.6  million,  an
unstated  amount in  excess of $1  million  based on the fraud  allegation,  and
punitive damages according to proof.

In December  2003,  the  defendants  sued the  plaintiff  in a  cross-complaint,
alleging (among other things) breach of good faith/fair dealing covenant, breach
of contract, fraud, misrepresentation, negligence, and breach of fiduciary duty.
The  cross-complainants  are seeking (a)  compensatory  damages of approximately
$1,960,000,  (b) the rescission of all agreements  between the plaintiff and the
defendants (such as the aforementioned  merger agreement),  (c) the cancellation
of all Company stock currently owned by the plaintiff,  and (d) punitive damages
in an unstated amount. This cross-complaint was amended in February 2004 to name
two other former officers/stockholders of Z prompt as additional defendants.

In  January  of 2004,  the  plaintiff  amended  his  complaint  to name  certain
officers/stockholders  of the Company as additional  defendants,  alleging fraud
and interference with contract. This action seeks compensatory damages in excess
of $2 million and punitive damages according to proof.

In June 2004,  the  Bankruptcy  Court  granted  the  plaintiff  relief  from the
automatic  stay  provided by the  Bankruptcy  Code (see Note 12)  regarding  the
litigation described above, and the matter

                                      F-41
is presently scheduled for trial in Orange County (California) Superior Court in
January  2005.  In the same  action,  Z prompt  agreed to withdraw its motion in
Bankruptcy Court seeking rejection of the executory  contracts  described above.
Management intends to vigorously defend the October 2003 lawsuit described above
(as  amended),  and does not believe that the  plaintiff's  recovery (if any) of
uninsured  damages  will  have  a  material  adverse  effect  on  the  Company's
consolidated financial statements.

                                     GENERAL

From time to time,  the Company may be involved in various  claims,  lawsuits or
disputes arising in the normal operations of its business. Other than the matter
described in Note 10, the Company is not currently  involved in any such matters
which management  believes could have a material adverse effect on the Company's
financial position or results of operations. Exclusive Supply Agreement

In December 2001, the Company entered into an exclusive supply contract expiring
in 2006  with a  vendor  to  manufacture  the  Voting  System  product.  Per the
agreement, if the supplier is unable to produce and deliver on time the required
quantity of  product,  the Company  may obtain the Voting  System  product  from
another supplier.

PROFESSIONAL

The Company has entered into general consulting/lobbying agreements with various
third  parties to provide  services  related  to the  marketing  and sale of the
Company's product in certain cities; such agreements expired through April 2004.
Pursuant to the agreements, the Company will pay commissions on sales within the
various territories, as defined.

During  the year  ended  June 30,  2003,  the  Company  entered  into a Location
Incentives   Agreement  (the  "LIA")  with  the  Amarillo  Economic  Development
Corporation  ("AEDC") to establish the  Company's  customer  service  center and
voting machine repair operations in Amarillo,  Texas.  According to the terms of
the LIA,  the AEDC  paid the  Company  $250,000  upon  execution  of a lease for
facilities in Amarillo.  The funds  advanced under the LIA are to be used solely
for the  operations  in Amarillo.  If the Company does not meet certain  minimum
employment  requirements  (as defined in the LIA),  it will be required to repay
all amounts  advanced.  The Company has recorded the advance in the accompanying
consolidated  balance  sheets in  accounts  payable  and  accrued  expenses.  In
connection with the LIA, the Company granted warrants to purchase 250,000 shares
of its restricted  common stock at an exercise price of $1.04 per share,  valued
at approximately $174,000 based on the Black-Scholes pricing model. The warrants
vested on the grant date, and expire in November 2012.

LEASE COMMITMENTS

The Company rents office space under operating lease  agreements which expire at
various dates through June 30, 2006.  The minimum  annual rent under such leases
approximates $170,000 in fiscal 2005 and $130,000 in fiscal 2006.

                                      F-42
NOTE 7 STOCKHOLDERS' EQUITY

PREFERRED STOCK

In December 2003, the Company entered into an agreement to issue 8,471 shares of
its cumulative  convertible Series A Preferred Stock ("Series A") and $1,200,000
of  convertible  notes payable in exchange for 3,325,000  shares of free trading
common stock of Material  Technologies,  Inc., a publicly  traded  company whose
common stock is quoted on the  Over-The-Counter  Bulletin Board under the symbol
"MTNA." In attempting to execute such  transaction,  the Company's intent was to
gain access to capital markets through the potential sale of MTNA common stock.

The Company  has not filed a  certificate  of  designation  with  respect to any
series of preferred stock. On May 7, 2004,  management entered into an agreement
whereby the Company  exchanged the 3,325,000  shares of common stock of Material
Technologies,  Inc. for the 8,471 shares of Series A. Accordingly,  as of May 7,
2004, no preferred stock was issued or outstanding. However, the Company remains
liable on the $1.2 million convertible note payable;  see Note 14 for additional
information.

The  accounting  adjustment  for  the  transaction  described  in the  preceding
paragraph  has been  reflected in the  accompanying  June 30, 2004  consolidated
financial  statements of the Company as "loss on disposal of  investment".  This
adjustment  of the  Company's  financial  statements  increased  the  previously
reported net loss for the quarter ended December 31, 2003 by approximately  $1.2
million ($0.01 per common share).

COMMON STOCK

In August 2003, the Company issued 7,000,000  shares of restricted  common stock
as collateral for potential  loan proceeds  approximating  $1,650,000  ("Secured
Note"), less applicable commissions.  The Secured Note accrues interest at 4.5%,
will require quarterly  interest-only payments through maturity, and matures two
years from receipt of proceeds.  As of the date of this filing,  the Company has
not received any proceeds or paid any related commissions.

During the quarter ended March 31, 2004, the Company issued 13,884,534 shares of
restricted common stock in connection with the exercise of warrants for proceeds
of approximately $2.3 million, net of commissions approximating $400,000.

During the quarter  ended March 31,  2004,  the  Company  also issued  1,724,167
shares  of  restricted  common  stock in  connection  with the  conversion  of a
$500,000 note payable plus accrued interest approximating $17,000.

In May 2004,  the  Company  issued  1,960,000  shares  of common  stock to three
different  shareholders,  as a result  of a net  exercise  of  warrants  with an
exercise price of $.0625 per share.

In June 2004,  the  Company  issued  3,105,262  shares of common  stock to three
different  shareholders,  as a result  of a net  exercise  of  warrants  with an
exercise price of $.0625 per share.

In June 2004, the Company issued 2,156,250 shares of common stock as a result of
convertible debt of $250,000 which was converted at $.1224 per share.

In July 2004,  the Company  issued  18,406,248  shares of common  stock to seven
different  shareholders,  as a result  of a net  exercise  of  warrants  with an
exercise price of $.0625 per share.

                                      F-43
WARRANTS

From time to time, the Company issues  warrants  pursuant to various  consulting
agreements

During the year ended June 30, 2003,  the Company  granted  warrants to purchase
250,000 shares of the Company's  restricted common stock at an exercise price of
$0.91 per share valued at $206,000 (based on the Black-Scholes pricing model) to
a consultant for services rendered,  which has been expensed in the accompanying
consolidated  statement  of  operations  for the year  ended June 30,  2003.  In
connection  with the  issuance,  the  warrant  holder  may cause the  Company to
re-purchase  any warrants not  previously  exercised by the warrant holder on or
after  June 2006 for $0.46  per  share.  Accordingly,  a  related  liability  of
$113,750 was recorded in the  accompanying  June 30, 2003  consolidated  balance
sheet, representing the Company's re-purchase liability.

During the  quarter  ended  March 31,  2004,  the  Company  granted  warrants to
purchase 375,000 shares of the Company's  restricted  common stock with exercise
prices ranging from $0.18 to 1.54 per share,  valued at  approximately  $953,000
(based on the Black-Scholes  pricing model), to various consultants for services
to be rendered  through  February 2005.  The Company is amortizing  such expense
over the term of the related services.

During the  quarter  ended  March 31,  2004,  the  Company  granted  warrants to
purchase  11,346,180  shares  of the  Company's  restricted  common  stock  with
exercise  prices ranging from $0.12 to $1.00 per share.  These  warrants  vested
upon grant, and are exercisable through March 2009. Such warrants were issued in
connection  with equity  fund-raising  activities and,  accordingly,  no related
expense was reported in the accompanying consolidated financial statements.

                                      F-44
A summary of changes in warrants during each period is presented below:

                                Weighted Average

                                              Warrants       Exercise Price
                                         ----------------    -----------------
Balance, August 9, 2001 (Inception)                   --        $          --
Warrants granted                              34,512,804                 0.08
Warrants exercised                            (9,901,316)               (0.11)
Warrants granted                              15,340,813                 0.29
Warrants exercised                            (4,393,886)               (0.11)
Warrants cancelled                            (3,972,000)               (0.25)
                                         ----------------    -----------------
Balance, June 30, 2003                        31,586,415               $ 0.15
                                         ================    =================
Warrants granted                              52,681,292                 0.48
Warrants exercised                           (21,067,794)               (0.22)
Warrants cancelled                                     -                    -
                                         ----------------    -----------------
Balance, June 30, 2004                        63,199,913               $ 0.40
                                         ================    =================
Warrants exercisable at June 30, 2004         63,199,913               $ 0.40
                                         ================    =================

Per share values at grant date of         Weighted Average    Weighted Average
warrants issued during fiscal 2004:         Fair Value         Exercise Price
                                         ----------------    -----------------
Less than fair market value                       $ 0.72               $ 1.55
                                         ================    =================
Equal to fair market value                        $ 0.87               $ 1.54
                                         ================    =================
Greater than fair market value                    $ 1.39               $ 0.25
                                         ================    =================

         The  following  table  summarizes   information   related  to  warrants
outstanding at June 30, 2004:
Warrants Outstanding                                    Warrants Exercisable
                     -------------------------------------------------------------------     ---------------------------------
                                             Weighted Average          Weighted Average                       Weighted Average
   Exercise Price          Number       Remaining Contractual Life      Exercise Price        Number           Exercise Price
------------------------------------------------------------------------------------------------------------------------------
$0.01 - $0.08          33,145,366                4.66               $      0.06           33,145,366      $       0.06
    $0.12 - $0.25           8,828,992                7.59                      0.17            8,828,992              0.17
    $0.26 - $0.50           4,239,428                5.14                      0.36            4,239,428              0.36
    $0.75 - $0.90           7,313,157                0.25                      0.76            7,313,157              0.76
    $1.00 - $1.40           9,672,970                4.63                      1.52            9,672,970              1.52
                          ----------------------------------------------------------------------------------------------------
                           63,199,913                4.68               $      0.40           63,199,913      $       0.40
F-45
The following  outlines the significant  assumptions  used to calculate
the estimated  fair value  information  presented  utilizing  the  Black-Scholes
pricing model:

                                  Year Ended       Year Ended       Period Ended
                                 June 30, 2004    June 30, 2003    June 30, 2002
                               ----------------  ---------------  --------------
Discount rate                        2.00%            3.50%            3.50%
Volatility                         72% - 112%      105% - 170%        0% - 51%
Expected life in years                 3                3                1
Expected dividend yield               --               --               --
                               ----------------  ---------------  --------------

STOCK OPTIONS

From time to time, the Company issues non-plan stock options pursuant to various
agreements and other compensatory arrangements to employees and third parties.

A summary of changes in stock options during each year is presented below:

                                                         Weighted average
                                          Stock Options   Exercise Price
                                          -------------   ---------------
Balance, August 9, 2001 (Inception)                   -     $          -
Options granted                               6,780,000              0.31
Options exercised                                     -                -
Options cancelled                                     -                -
                                          -------------   ---------------
Balance, June 30, 2002                        6,780,000              0.31
Options granted                               5,670,000              0.94
Options exercised                                     -                 -
Options cancelled                                     -                 -
                                          -------------   ---------------
Balance, June 30, 2003                       12,450,000     $        0.60
Options granted                                 600,000              1.54
Options exercised                              (550,000)             0.51
Options cancelled                                     -                 -
                                          -------------

Balance, June 30, 2004                       12,500,000     $        0.65
                                          =============   ===============

Options exercisable at June 30, 2004          9,117,500     $        0.64
                                          =============   ===============

                                      F-46
Per share values at grant date of      Weighted Average  Weighted Average
options issued during fiscal 2004:         Fair Value      Exercise Price
                                       ----------------  ----------------
   Less than fair market value                      N/A               N/A
                                       ================  ================
   Equal to fair market value          $           0.74  $           1.54
                                       ================  ================
   Greater than fair market value                   N/A               N/A
                                       ================  ================

The following table summarizes information related to options at June 30, 2004:
Options Outstanding                          Options Exercisable
                         ----------------------------------------------------     ---------------------------
                                        Weighted Average
                                      Remaining Contractual   Weighted Average               Weighted Average
        Exercise Price      Number            Life             Exercise Price     Number      Exercise Price
-------------------------------------------------------------------------------------------------------------
$0.31         6,480,000          7.92               $   0.31       4,500,000    $    0.45
             $0.91         5,160,000          8.97                   0.91       3,982,500         1.21
             $1.50           260,000          1.61                   1.50         260,000         1.50
             $1.54           600,000          8.44                   1.54         375,000         0.24
                         -----------------------------------------------------------------------------------
Total                     12,500,000          8.25               $   0.68       9,117,500    $    0.64
                         -----------------------------------------------------------------------------------
The  following  outlines  the  significant  assumptions  used to  calculate  the
estimated fair value information  presented utilizing the Black-Scholes  pricing
model:

                                Year Ended     Year Ended     Period Ended
                              June 30, 2004  June 30, 2003     June 30, 2002
                              -------------  -------------  ----------------
Discount rate                     2.00%             3.50%           3.50%
Volatility                         72%               170%          0% - 51%
Expected life in years              3                 3               3
Expected dividend yield             --                --              --
                              -------------  -------------  ----------------

                                      F-47
NOTE 8 INCOME TAXES

Income tax expense,  all current, for the years ended June 30, 2004 and 2003 and
the period from August 9, 2001  (Inception)  through June 30, 2002 differed from
the amounts  computed by applying the U.S. Federal income tax rate of 34 percent
to the loss before income taxes as a result of the following:
2004           2003           2002
                                                   -----------    -----------    -----------
Computed "expected" tax benefit                    $(4,756,000)   $(1,649,000)   $  (801,000)
Adjustment in income taxes resulting from:

    Change in valuation allowance                    4,334,000      1,891,000        921,000
    Other                                                   --            800            800
    State and local income taxes, net of federal      (439,600)      (242,000)      (120,000)
    Goodwill Impairment                                864,000             --             --
                                                   -----------    -----------    -----------
                                                   $     2,400    $       800    $       800
                                                   ===========    ===========    ===========
The tax effects of temporary  differences that give rise to significant portions
of the deferred tax assets at June 30, 2004, 2003 and 2002 are presented below:

                                          2004          2003           2002
                                      -----------   -----------   -----------
Net Operating Losses                    4,052,000       199,000        86,000
Stock-based Compensation                1,327,000     1,327,000       456,000
Start-up Costs                          1,142,000     1,142,000       309,000
Loss on Investments                       480,000            --            --
Capitalized research and development       70,000        70,000        70,000
Other                                      75,000        74,000            --
                                      -----------   -----------   -----------
Deferred tax asset                      7,146,000     2,812,000       921,000
Less: Valuation Allowance              (7,146,000)   (2,812,000)     (921,000)
                                      -----------   -----------   -----------
Net deferred tax asset                         --            --            --
                                      ===========   ===========   ===========

As of June 30,  2004,  the Company  had tax net  operating  loss carry  forwards
("NOLs") of approximately  $10,800,000 and $6,400,000 available to offset future
taxable  income for Federal and State  purposes,  respectively.  The Federal and
State carry forwards expire in varying amounts through 2024. Effective September
11, 2002,  pursuant to California  revenue and tax code section 24416.3,  no net
operating  loss  deduction  will be allowed for any taxable year beginning on or
after January 1, 2002, and before January 1, 2004. For any suspended losses, the
carry  forward  period is extended by one year for losses  incurred in tax years
beginning on or after January 1, 2002,  and before  January 1, 2003;  and by two
years for losses incurred in taxable years beginning before January 1, 2002.

                                      F-48
Due to the change in ownership  provisions of the Internal  Revenue Code Section
382,  net  operating  loss  carry  forwards  for  Federal  and State  income tax
reporting  purposes  are  subject to annual  limitations.  Should an  additional
change in ownership  occur,  net operating loss carry forwards may be limited as
to their use in future years.

In 2004,  2003 and 2002, the Company  concluded that a full valuation  allowance
against its net deferred tax assets was  appropriate.  SFAS 109 requires  that a
valuation allowance must be established when it is more likely than not that all
or a portion  of  deferred  tax  assets  will not be  realized.  In making  such
determination,  a review of all available positive and negative evidence must be
considered, including scheduled reversal of deferred tax liabilities,  projected
future  taxable  income,   tax  planning   strategies,   and  recent   financial
performance.  The accounting  guidance  further states that forming a conclusion
that a valuation  allowance  is not needed is  difficult  when there is negative
evidence such as cumulative losses in recent years. As a result of the Company's
recent cumulative losses, the Company concluded that a full valuation  allowance
should be recorded in 2004, 2003 and 2002.

NOTE 9 SIGNIFICANT FOURTH QUARTER ADJUSTMENTS - FISCAL 2003

In June  2003,  the  Company  recorded  an  adjustment  to  capitalize  software
development  costs of  approximately  $436,000 that were previously  expensed in
earlier  fiscal 2003  quarters  relating to WTI.  The  allocation  of such costs
incurred from a related party (see Note 5) was adjusted in the fourth quarter of
fiscal 2003. The effect of this adjustment on the first three quarters of fiscal
2003 is summarized below:

                                                 QUARTER ENDED
                                     9/30/02        12/31/02        3/31/03
                                   -----------    -----------    -----------
Net loss, as previously reported   $  (738,639)   $(1,683,613)   $(1,115,187)
Adjustment described above             162,315        157,725        115,775
                                   -----------    -----------    -----------
Net loss, as restated              $  (576,324)   $(1,528,888)   $  (999,412)
                                   ===========    ===========    ===========

Such  adjustment  had no effect on the  basic/diluted  (rounded) loss per common
share for any of the first three quarters of fiscal 2003.

NOTE 10 EQUITY INSTRUMENTS SUBJECT TO RESCISSION

The Company may be subject to possible claims for rescission with respect to the
sale or other  issuances of certain  common  stock,  options and  warrants.  The
accompanying  consolidated  balance  sheets reflect an adjustment for the matter
described below.

Approximately  26.6 million  shares of the Company's  common stock,  options and
warrants that were issued or granted in the United States  without  registration
or  qualification  under  federal or state  securities  laws during the two-year
period ended June 30, 2004 may be subject to rescission. The fair value of these
securities was estimated  based on a combination of (a) the selling price of the
common stock on the dates sold, (b) the price per the agreement for stock issued
in conversion  of debt,  (c) the fair value of the stock options and warrants on
their grant dates, and (d) an independent valuation.  Based in part on advice of
counsel,  the fair value of these options and warrants was  estimated  using the
Black-Scholes  option-pricing  model. Based on these measurement  criteria,  the
Company's  potential  liability  directly  associated  with  the  aforementioned
securities  transactions  is estimated to  approximate  $6.2 million  (including
interest) at June 30, 2004 plus legal fees and any fines or penalties that might
be assessed by regulatory agencies.

Based on advice of counsel,  the potential  liability  discussed  above does not
include options to purchase a total of 3.6 million shares of common stock issued
to the Company's  president and to its chief executive officer because these two
individuals  are also principal  stockholders of the Company;  acting  together,
they have the ability to control the Company.  The  estimated  fair value of the
options described in this paragraph (excluding interest) approximated $1,360,000
at June 30, 2004.

Management is unable to determine at this time whether any claim for  rescission
may be filed against the Company;  however,  there can be no assurance that such
claims will not be asserted.

                                      F-49
In addition,  regulatory  agencies  could launch a formal  investigation  and/or
institute an enforcement proceeding against the Company.

The  ultimate   outcome  of  the  matters   discussed  above  is  not  presently
determinable. Accordingly, management is unable to estimate the total liability,
if any, that the Company may incur as a result of such contingencies. Regardless
of how remote a rescission event may be, GAAP as interpreted by the SEC requires
that  equity  securities  subject  to  rescission  be  reported  outside  of the
stockholders'  equity section of the balance sheet until the applicable statutes
of limitations have expired.  Thus, the Company has reported  approximately $6.2
million as "mezzanine  equity" in the  accompanying  June 30, 2004  consolidated
balance sheet.

Approximately  8.5  million  shares  of the  Company's  common  stock  issued in
connection with the  acquisition of Z prompt,  with an  issuance-date  estimated
fair value of approximately  $1.8 million,  have been excluded from the June 30,
2003 mezzanine equity amount, as the acquisition was not recorded until November
2003 for reasons described in Note 3.

NOTE 11 RESTATEMENT OF STATEMENTS OF OPERATIONS

Subsequent  to the original  issuance of the Company's  June 30, 2003  financial
statements,  it was determined that consulting  services,  for which the Company
had  granted a warrant  to  purchase  1 million  shares of common  stock with an
estimated  fair  value of  $655,000,  had not  been  and will not be  performed.
Therefore,  the accompanying  consolidated statements of operations for the year
ended June 30, 2003 and for the period from Inception through June 30, 2003 have
been  restated.  The effect of such  restatement  was to reduce  the  previously
reported net loss by $655,000 with no effect on (rounded) loss per common share.

NOTE 12. BANKRUPTCY FILING OF WHOLLY-OWNED SUBSIDIARY Z PROMPT

On March 23, 2004 (the  "Petition  Date"),  Z prompt (or the  "Debtor")  filed a
voluntary  petition for relief (the  "Chapter 11 Case") under  Chapter 11 of the
United  States  Bankruptcy  Code (the  "Bankruptcy  Code") in the United  States
Bankruptcy  Court  for the  Central  District  of  California  (the  "Bankruptcy
Court"). Since the Petition Date, Z prompt has conducted its business activities
as a debtor-in-possession under the Bankruptcy Code.

As a result of the Chapter 11 Case, the realization of Z prompt's assets and the
liquidation of its  liabilities  are subject to  uncertainty.  In the Chapter 11
Case, a substantial portion of the Debtor's  liabilities as of the Petition Date
is  subject  to  compromise  or  other  treatment  under  a  confirmed  plan  of
reorganization.  Generally,  actions to enforce or otherwise effect repayment of
all  pre-Chapter 11  liabilities  (as well as any pending  litigation,  absent a
stipulation to the contrary - see the "Z prompt  litigation"  section of Note 6)
against the Debtor are stayed while Z prompt operates as a  debtor-in-possession
during bankruptcy proceedings. Schedules have been filed by the Debtor with

                                      F-50
the Bankruptcy  Court setting forth the liabilities  (approximately  $1 million)
and assets of Z prompt as of the Petition Date based on its unaudited accounting
records.  Any differences between amounts reflected in such schedules and claims
filed by creditors will be investigated, and will either be amicably resolved or
adjudicated by the Bankruptcy Court. The ultimate amount and settlement terms of
such liabilities are not presently determinable.

Financial  accounting  and  reporting  during a Chapter 11 case are  governed by
Statement   of  Position   No.   90-7,   FINANCIAL   REPORTING  BY  ENTITIES  IN
REORGANIZATION  UNDER THE  BANKRUPTCY  CODE  ("SOP  No.  90-7").  For  financial
reporting purposes, Z prompt's pre-petition  liabilities and obligations,  which
may be  subject to  settlement  or  otherwise  dependent  on the  outcome of the
Chapter 11 case, have been segregated and classified as "liabilities  subject to
compromise" in the accompanying  June 30, 2004  consolidated  balance sheet (see
Note 17). Z prompt did not have any significant  reorganization items (income or
expense)  during the year ended June 30, 2004.  Certain  additional  disclosures
including  (a) claims not subject to  reasonable  estimation of the amount to be
allowed and (b) any significant difference between reported interest expense and
stated contractual  interest will be provided (as required by SOP No. 90-7) when
such amounts are determinable and/or when the related transactions occur.

Management  continues to conduct the business  activities  of Z prompt under the
supervision  of the  Bankruptcy  Court and,  among other  things,  the Debtor is
granted a 120-day  exclusive  right to propose a plan of  reorganization,  which
must be approved by the  creditors  and confirmed by the  Bankruptcy  Court.  In
accordance  with the Bankruptcy  Code, an automatic stay provides that creditors
of Z prompt and other parties in interest are prevented  from seeking  repayment
of pre-petition debts. Additionally, unless otherwise approved by the Bankruptcy
Court, the Debtor must refrain from paying any pre-petition indebtedness.

On  April  20,  2004,  the  Bankruptcy  Court  approved  a  debtor-in-possession
financing  arrangement  whereby Z prompt is  permitted  to  obtain  credit  from
AeroFund  Financial,  Inc.  of no more than  $500,000  through  the sale  and/or
factoring of its  post-petition  accounts  receivable;  this credit  facility is
collateralized by a security interest in such accounts receivable.

Although  legal fees and other  administrative  expenses  to complete Z Prompt's
bankruptcy  proceedings  may  be  significant,   they  are  not  susceptible  of
reasonable  estimation at this time. Z prompt could decide to reject some or all
of its lease obligations in the Chapter 11 Case. This action may result in lease
rejection  claims  pursuant to the  Bankruptcy  Code;  any such claims  would be
adjudicated by the Bankruptcy Court.

An important element in successfully reorganizing the Debtor will be the ability
to restructure  certain  liabilities in order to reduce indebtedness and provide
funding for  operations.  As part of the process of attempting to reorganize,  Z
prompt intends to pursue various financing

                                      F-51
alternatives that may be available,  although there can be no assurance that the
Debtor will be able to successfully  implement any such  alternatives.  Though Z
prompt  intends to make efforts to increase its revenues to improve  operations,
it is possible that losses will continue for the foreseeable future and that the
Debtor will require  additional funding and financial support from a third party
and/or its parent  company.  There can be no assurance that any such  additional
financing will be available on acceptable  terms, that such funds (if available)
would  enable  Z prompt  to  continue  operating,  or that  the  Debtor  will be
successful in increasing its revenues.  In addition,  there is no assurance that
the creditors and the Bankruptcy Court will approve a  reorganization  plan that
will allow Z prompt to survive.

The Company's March 23, 2004 receivable from Z prompt (which has been eliminated
in  consolidation,  and therefore is not included in the Note 18  disclosure) of
approximately $275,000 is subject to compromise in the bankruptcy proceedings.

Condensed  financial  information  of Z prompt  as of June 30,  2004 and for the
period from November 1, 2003 (when the  acquisition  was recorded for accounting
purposes) to June 30, 2004 is presented below.

                                  Z PROMPT INC.
                            BALANCE SHEET (Unaudited)
                                  June 30, 2004

                                     ASSETS

CURRENT ASSETS
      Cash                                                   $     34,010
      Accounts receivable, net                                    254,895
      Inventories                                                  20,667
                                                             ------------
                                                                  309,572
OTHER, net                                                          2,512
                                                             ------------

      TOTAL ASSETS                                           $    312,084
                                                             ============
             LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
      Accounts payable and accrued expenses                  $    301,734
      Loan from parent company                                    620,395
      Deferred revenues                                            74,628
      Liabilities subject to compromise                           732,544
                                                             ------------
      TOTAL LIABILITIES                                         1,729,301
                                                             ------------
STOCKHOLDERS' DEFICIT                                          (1,417,217)
                                                             ------------
      TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT            $    312,084
                                                             ============

                                      F-52
Z PROMPT INC.
                       STATEMENT OF OPERATIONS (UNAUDITED)

                                     EIGHT MONTHS ENDED
                                       JUNE 30, 2004
                                       -------------
NET SALES                              $   1,508,656
COST OF SALES                              1,185,797
                                       -------------
GROSS PROFIT                                 322,859
EXPENSES

      General and administrative             586,011
      Salaries and related                   279,293
      Interest                               128,710
      Loss on disposal of assets              16,648
                                       -------------
                                           1,010,662
                                       -------------
PRETAX LOSS                            $   (687,803)
                                       =============

                                      F-53
NOTE 13 SUBORDINATED CONVERTIBLE DEBT

In July 2003, the Company  borrowed  $500,000  under a subordinated  convertible
note payable, (the "Subordinated  Convertible Note"), which bears interest at 7%
per annum. All borrowings were due six months from the receipt of proceeds, with
semi-annual  interest payments on the outstanding balance. In December 2003, the
Subordinated  Convertible  Note  was  converted  into  1,666,667  shares  of the
Company's restricted common stock at $0.30 per share.

A BCF approximating $500,000 was recorded during the quarter ended September 30,
2003.  Such discount was amortized to interest  expense  during the three months
ended September 30, 2003, as the  subordinated  convertible note was convertible
upon  issuance.   Since  the  Subordinated   Convertible  Note  was  immediately
convertible,  the entire BCF was  charged to interest  expense in the  Company's
restated financial statements for the quarter ended September 30, 2003.

NOTE 14 CONVERTIBLE NOTES PAYABLE

                             THE NOVEMBER 2003 NOTES

In November 2003, we secured a $5 million dollar revolving  credit facility,  in
the form of two  seven-month  convertible  notes.  The notes bear interest at an
annual  rate of 10% and  originally  matured  on June 30,  2004,  but have  been
extended to December 31, 2004. The notes are  convertible on ninety days written
notice by the  holders  at the  lesser of (i) 50% of the  average  three  lowest
closing  prices for our common stock for the twenty days  immediately  preceding
the conversion  date or (ii) $.0625 per share. At June 30, 2004, we had borrowed
$2,180,000  under such  notes.  Included in this  balance  the Company  borrowed
$1,200,000 in connection  with a transaction  with Material  Technologies,  Inc.
(see Note 7). The Company subsequently  un-wound the Material  Technologies Inc.
transaction  and  expensed  the entire  $1,200,000  as a loss on disposal of the
investment in Material  Technologies  Inc.'s common stock. At June 30, 2004, the
Company  remains  liable for the $1.2  million  convertible  debt as part of the
total borrowings under such notes.

                           OTHER FISCAL 2004 ACTIVITY

As  consideration  for renewing  certain  convertible debt (including the credit
facility  described in the  preceding  paragraph)  and in payment of interest on
such  debt,  the  Company  issued  a total  of  approximately  $1.3  million  of
additional convertible debt during the year ended June 30, 2004.

                                      F-54
THE JANUARY 2004 NOTE

In January 2004, the Company borrowed  $250,000 under a convertible note payable
(the "January  Note"),  which bears  interest at 7% per annum.  All  borrowings,
including interest, were due in July 2004. The January Note was convertible into
restricted common stock of the Company at a rate of $0.12 per share, at any time
at the option of the note holder.  In June 2004,  the January Note was converted
into 2,083,333 shares of the Company's common stock.

A beneficial conversion feature  approximating  $250,000 was recorded during the
quarter ended March 31, 2004, and was expensed upon issuance of the January Note
based on the immediate conversion feature.

NOTE 15 LINE OF CREDIT

Z prompt had a revolving line of credit  agreement (the "Line") with a financial
institution,  which bore interest at 5% per annum. A shareholder of the Company,
who is a former  majority  shareholder of Z prompt,  has guaranteed the Line. At
June 30, 2004, the outstanding  borrowings  under this credit  facility  totaled
$225,000,  which is  included  in  "liabilities  subject to  compromise"  in the
accompanying June 30, 2004 consolidated balance sheet.

NOTE 16 SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

Selected  quarterly  financial  data for each of the  quarters  in the  two-year
period ended June 30, 2004 are presented below.

                                         FOR THE QUARTER ENDED

                          9/30/03         12/31/03        3/31/04       6/30/04
                          -------         --------        -------       -------
Net sales                $     --        $ 361,232      $ 620,140     $ 527,284
Gross profit                   --          218,729         15,568        88,562
Net loss               (1,612,690)      (3,593,022)    (4,282,293)   (5,891,248)
Loss per common share       (0.02)           (0.03)         (0.03)        (0.04)

                                         FOR THE QUARTER ENDED

                          9/30/02         12/31/02       3/31/03       6/30/03
                          -------         --------       -------       -------
Net sales               $      --       $       --      $     --      $     --
Gross profit                   --               --            --            --
Net loss                 (576,324)      (1,528,888)     (999,412)   (1,743,943)
Loss per common share       (0.01)           (0.01)        (0.01)        (0.02)

See the  "Restatements and  Reclassifications"  section of Note 1 for additional
information.

                                      F-55
NOTE 17 LIABILITIES SUBJECT TO COMPROMISE

The March 23, 2004  balances of Z prompt's  liabilities  that became  subject to
compromise  on that date  (excluding  its  liability to the parent  company) are
approximately as follows:

Accounts  payable and accrued expenses    $ 335,544
Secured line of credit payable (Note 15)    225,000
Note payable to related party               172,000
                                          ---------
         Total                            $ 732,544
                                          =========

NOTE 18 SUBSEQUENT EVENT (UNAUDITED)

NOVEMBER 2004 PRIVATE PLACEMENT

         On  November  4,  2004,  the  company  completed  a  private  placement
transaction  with the same investors  from the First Closing,  pursuant to which
the company sold an aggregate of  6,050,000  shares of common  stock,  3,025,000
Series A Warrants,  3,025,000  Series B Warrants and 3,025,000 Series C Warrants
(the "Second  Closing").  The company received gross proceeds totaling $605,000.
For each two shares of common stock, the company issued investors one A Warrant,
one B Warrant and one C Warrant. Each two shares and three warrants were sold at
a  total  price  of  $0.20.  The  private   placement  was  deemed  exempt  from
registration  requirements  under Rule 506 of Regulation D of the Securities Act
of 1933. We are  registering in this offering  6,050,000  shares of common stock
and 9,075,000 shares issuable upon exercise of these outstanding warrants, which
includes  a good  faith  estimate  of  shares  of common  stock to  account  for
antidilution and price protection adjustments.

         The Second Closing triggered certain repricing adjustments to the terms
of the First Closing.  Accordingly, the purchase price for the First Closing was
adjusted  to $0.20 for each two shares  and three  warrants  that were sold.  As
adjusted,  the company IS obligated to issue an additional  12,832,552 shares of
common  stock,  6,233,501  Series A Warrants,  6,233,501  Series B Warrants  and
6,233,501 Series C Warrants.  For the First Closing,  the company is registering
in this  offering  16,498,999  shares of  common  stock  and  24,748,499  shares
issuable  upon  exercise of warrants,  which  includes a good faith  estimate of
shares of common stock to account for further  antidilution and price protection
adjustments.  The terms of the Series A Warrants,  the Series B Warrants and the
Series C Warrants, as adjusted are as follows:

         The company agreed to file with the Securities and Exchange  Commission
not later than 30 days after the closing date of the Second  Closing,  and cause
to be effective within 120 days after the closing date of the Second Closing,  a
registration  statement  "rs" in order to  register  the shares of common  stock
issued to the investors and the shares  underlying  the warrants,  including the
shares  issuable upon exercise of warrants  issued to the  placement  agent.  In
addition,  on one  occasion,  for a period  commencing 91 days after the closing
date of the Second Closing,  but not later than two years after the closing date
of the Second  Closing,  upon written request of the holders of more than 50% of
the shares and warrant  shares  actually  issued upon exercise of warrants,  the
company is required to prepare and file a registration statement. The A Warrants
expire 150 days from the date the rs is declared effective by the Securities and
Exchange  Commission  and are  exercisable  at $0.12 per  share.  The B Warrants
expire four years after the date the rs is declared  effective by the Securities
and Exchange  Commission and are exercisable at $0.15 per share.  The C Warrants
expire three years after the date the rs is declared effective by the Securities
and Exchange Commission and are exercisable at $0.50 per share.

         The company may call the  warrants  beginning 30 trading days after the
effective date of the rs and ending 30 trading days before the expiration of the
warrants.  A call  notice may be given by the  company  for the A Warrants  only
within  five  trading  days  after the common  stock has had a closing  price as
reported for the principal market of $0.24 or higher for 15 consecutive  trading
days.  A call notice may be given by the company for the B Warrants  only within
five trading days after the common stock has had a closing price as reported for
the principal market of $0.30 or higher for 15 consecutive  trading days. A call
notice may be given by the company for the C Warrants  only within five  trading
days  after  the  common  stock  has had a  closing  price as  reported  for the
principal market of $1.00 or higher for 15 consecutive trading days.

         Beginning  November 4, 2004 and until the rs has been effective for 150
days,  the  investors  must be given at least ten

                                      F-56
business days prior written notice of any proposed sale by the company of common
stock or other  securities or debt  obligations  except in  connection  with (a)
employee stock options or compensation  plans, (b) documented legal fees, or (c)
the company  already  issued and  outstanding  shares of common  stock as of the
closing  date of the Second  Closing.  Such  proposed  sales are  referred to as
"excepted issuances."

         Other  than  the  excepted   issuances,   if  at  any  time  until  the
registration statement has been effective for 150 days, the company offer, issue
or agree to issue any common stock or securities convertible into or exercisable
for  shares  of  common  stock  (or  modify  any of the  foregoing  which may be
outstanding at any time prior to the closing date of the Second  Closing) to any
person or entity at a price per share or conversion or exercise  price per share
which shall be less than $0.10,  without the consent of each investor,  then the
company is  required  to issue,  for each such  occasion,  additional  shares of
common stock to each  investor so that the average per share  purchase  price of
the shares of common stock and the warrants  issued to the investor (of only the
common  stock or warrant  shares  still owned by the  investor) is equal to such
other lower price per share.  For purposes of this issuance and adjustment,  the
issuance of any security carrying the right to convert such security into shares
of common stock will result in the issuance of the  additional  shares of common
stock upon the issuance of such convertible security,  warrant,  right or option
and again upon any subsequent  issuances of shares of common stock upon exercise
of such  conversion or purchase rights if such issuance is at a price lower than
$0.10.

         The exercise price of the warrants is also subject to adjustment in the
event we effect a  reorganization,  consolidation or merger,  or transfer all or
substantially  all of our properties or assets.  Also, until the expiration date
of the  warrants,  if the company  issue any common  stock  other than  excepted
issuances,  prior to the complete  exercise of the warrants for a  consideration
less than the warrant exercise price that would be in effect at the time of such
issue, then the exercise price shall be reduced to such other lower issue price.
For purposes of this adjustment, the issuance of any security or debt instrument
carrying the right to convert such security or debt instrument into common stock
or of any warrant,  right or option to purchase  common stock shall result in an
adjustment  to the  exercise  price  upon the  issuance  of the  above-described
security, debt instrument, warrant, right, or option.

                                      F-57
UP TO
                                   105,818,544
                                    SHARES OF
                                  COMMON STOCK

                                       OF

                             ACCUPOLL HOLDING CORP.

                                   PROSPECTUS

                 The date of this prospectus is __________, 2004
PART II

                     INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13.  OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

         The  following  table  sets  forth  an  itemization  of  all  estimated
expenses,  all of  which we will  pay,  in  connection  with  the  issuance  and
distribution of the securities being registered:

                      NATURE OF EXPENSE                        AMOUNT
                      -----------------                     -----------
                      SEC Registration fee                  $ 1,170.76
                      Accounting fees and expenses           45,000.00*
                      Legal fees and expenses                40,000.00*
                                                            -----------
                                            TOTAL           $86,170.76*
                                                            ===========
                      * Estimated

ITEM 14.  INDEMNIFICATION OF DIRECTORS AND OFFICERS.

         Our Bylaws  authorize us to indemnify  any person who was or is a party
or is threatened  to be made a party to any  threatened,  pending,  or completed
action,  or suit by reason  of the fact  that he or she is or was our  director,
officer,  employee, or agent, or is or was serving at our request as a director,
officer, employee, or agent of another corporation,  partnership, joint venture,
trust  or  other  enterprise,  against  expenses  (including  attorneys'  fees),
judgments,  fines,  and  amounts  paid in  settlement  actually  and  reasonably
incurred by him or her in connection  with any such action,  suit or proceeding,
if he or she acted in good faith and in a manner he or she  reasonably  believed
to be in or not opposed to our best interests, and, with respect to any criminal
action or proceeding,  had no reasonable cause to believe his or her conduct was
unlawful. The termination of any action, suit, or proceeding by judgment, order,
settlement,  conviction,  or upon a plea of nolo  contendre  or its  equivalent,
shall not, of itself,  create a presumption  that the person did not act in good
faith  and in a  manner  which  he or she  reasonably  believed  to be in or not
opposed  to our best  interests,  and with  respect  to any  criminal  action or
proceeding,  he or she had  reasonable  cause to believe that his or her conduct
was unlawful.  No indemnification may be made in respect of any claim, issue, or
matter as to which such a person has been  adjudged to be liable for  negligence
or  misconduct in the  performance  of his or her duty to us, unless and only to
the extent that the court in which the action or suit was brought  determines on
application  that,  despite the  adjudication  of  liability  but in view of all
circumstances  of the case,  the person is fairly  and  reasonably  entitled  to
indemnity for such expenses as the court deems proper.

         To the extent that a  director,  officer,  employee,  or agent has been
successful  on the  merits  or  otherwise  in  defense  of any  action,  suit or
proceeding,  or in defense of any claim,  issue,  or matter  therein,  he or she
shall be indemnified against expenses  (including  attorneys' fees) actually and
reasonably  incurred  by  him  or  her  in  connection   therewith.   Any  other
indemnification  shall be made upon a determination that  indemnification of the
officer, director,  employee, or agent is proper in the circumstances because he
or she has met the applicable  standard of conduct set forth in our Bylaws. Such
determination  shall be made either: (i) by our Board of Directors by a majority
of a quorum consisting of directors who were not parties to such action, suit or
proceeding;  (ii) by independent legal counsel on a written opinion; or (iii) by
our  shareholders  by a majority vote of a quorum of shareholders at any meeting
duly called for such purpose.

         By its terms, the  indemnification  provided by our Bylaws shall not be
deemed exclusive of any other indemnification granted under any provision of any
statute,  in our Articles of Incorporation,  in our Bylaws,  agreement,  vote of
shareholders or  disinterested  directors,  or otherwise,  both as to his or her
official  capacity  and as to action in  another  capacity  while  holding  such
office,  and shall  continue  as to a person  who has  ceased to be a  director,
officer,  employee,  or agent,  and shall  inure to the benefit of the heirs and
legal representatives of such a person.

         We are authorized by our Bylaws to pay expenses incurred of a director,
officer,  employee or agent in  defending a civil or  criminal  action,  suit or
proceeding  in  advance  of the  final  disposition  of such  action,  suit,  or
proceeding  upon a majority  vote of a quorum of our Board of Directors and upon
receipt of an undertaking by or on behalf of the director,  officer, employee or
agent to repay such amount or amounts unless it is ultimately determined that he
or she is to be indemnified by us.

         Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the  "Act" or  "Securities  Act") may be  permitted  to  directors,
officers or persons  controlling  us pursuant to the  foregoing  provisions,  or
otherwise,  we have been  advised  that in the  opinion  of the  Securities  and
Exchange Commission,  such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable.

                                      II-1
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the  "Act" or  "Securities  Act") may be  permitted  to  directors,
officers or persons  controlling  us pursuant to the  foregoing  provisions,  or
otherwise,  we have been  advised  that in the  opinion  of the  Securities  and
Exchange Commission,  such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable.

ITEM 15.  RECENT SALES OF UNREGISTERED SECURITIES.

         The  following  sets  forth  information  regarding  all  sales  of our
unregistered  securities  during  the past  three  years.  All of the  following
issuances  and sales were exempt from  registration  under  Section  4(2) of the
Securities Act of 1933, as amended, and/or Regulation S, promulgated pursuant to
the Securities Act of 1933, as amended. Except as expressly set forth above, the
individuals  and  entities to whom we issued  securities  as  indicated  in this
section of the registration statement are unaffiliated with us.

COMMON STOCK

         In April  2002,  we issued  612,800  shares  of common  stock to Source
Technologies,  an unrelated  party,  in connection with the assumption of a note
receivable  from Web Tools  International,  Inc.  The common stock was valued at
$50,000 ($0.08 per share),  which is the amount of the assumed receivable.  This
issuance was exempt from registration pursuant to Section 4(2) of the Securities
Act of 1933, as amended.

         In April  2002,  we issued  3,840,000  shares of common  stock to three
consultants  as  non-refundable  retainers  in  exchange  for  general  business
consulting  services.  The  common  stock was valued at  approximately  $307,200
($0.08 per share).  These  issuances were exempt from  registration  pursuant to
Section 4(2) of the Securities Act of 1933, as amended.

         In May 2002, we issued  75,500,000 shares of common stock in connection
with a stock  exchange  with the  holders of all of the  issued and  outstanding
capital  stock of AccuPoll,  Inc., a Delaware  corporation,  regarding a reverse
acquisition transaction.  This issuance was exempt from registration pursuant to
Section 4(2) of the Securities Act of 1933, as amended.

         In May 2002, in connection  with the reverse  acquisition  of AccuPoll,
Inc., we issued  18,639,000 shares of common stock to shareholders of the public
company and various  finders,  including  Aramis  Investments,  LLC, The Glacier
Trust,  The  Viper  Trust,  The  Morpheus  Trust,   Picasso,   LLC  and  various
shareholders  of Web Tools  International,  Inc.  This  issuance was exempt from
registration pursuant to Section 4(2) of the Securities Act of 1933, as amended.

         In August 2002, we issued  208,540  shares of common stock to unrelated
parties in connection with cashless exercises of warrants.  These issuances were
exempt from registration pursuant to Section 4(2) of the Securities Act of 1933,
as amended.

         In August  2002,  we issued  120,000  shares of common  stock valued at
$140,400 (based on the market price on the date of grant) for services rendered.
This  issuance  was exempt from  registration  pursuant  to Section  4(2) of the
Securities Act of 1933, as amended.

         In August 2002, we issued  472,000 shares of common stock in connection
with the exercise of warrants  totaling  $56,640.  This issuance was exempt from
registration pursuant to Section 4(2) of the Securities Act of 1933, as amended.

         In  September  2002,  we  issued  245,120  shares  of  common  stock in
connection  with the exercise of warrants for conversion of accounts  payable in
the amount of $20,200.  This issuance was exempt from  registration  pursuant to
Section 4(2) of the Securities Act of 1933, as amended.

         In  September  2002,  we  issued  462,500  shares  of  common  stock in
consideration  for $125,000  cash.  This  issuance was exempt from  registration
pursuant to Section 4(2) of the Securities Act of 1933, as amended.

         In  October  2002,  we  issued  1,539,278  shares  of  common  stock in
connection  with  the  exercise  of  warrants  for cash  totaling  approximately
$190,000. This issuance was exempt from registration pursuant to Section 4(2) of
the Securities Act of 1933, as amended.

         In December  2002,  we issued  8,500  shares of common  stock valued at
$10,625 (based on the market price on the date of grant) for services  rendered.
This  issuance  was exempt from  registration  pursuant  to Section  4(2) of the
Securities Act of 1933, as amended.

         In  December  2002,  we  issued  816,994  shares  of  common  stock  in
connection  with the  exercise  of warrants  for cash  totaling  $100,000.  This
issuance was exempt from registration pursuant to Section 4(2) of the Securities
Act of 1933, as amended.

                                      II-2
In December  2002,  we issued  333,454  shares of common stock for cash
totaling $40,815. This issuance was exempt from registration pursuant to Section
4(2) of the Securities Act of 1933, as amended.

         In December  2002,  we issued  100,000  shares of common stock for cash
totaling $25,000. This issuance was exempt from registration pursuant to Section
4(2) of the Securities Act of 1933, as amended.

         On January  3,  2003,  we issued  20,000  shares of common  stock to an
individual  for services  totaling  $28,000 in reliance upon Section 4(2) of the
Securities Act of 1933, as amended.

         On January 27,  2003,  we issued  40,000  shares of common stock to one
individual  for $10,000 cash ($0.25 per share) in reliance  upon Section 4(2) of
the Securities Act of 1933, as amended.

         On January 28, 2003, we issued  192,750 shares of common stock to seven
individuals in consideration for $23,592.60 cash ($0.1224 per share) in reliance
upon Regulation S under the Securities Exchange Act of 1933, as amended.

         On February 13, 2003,  we issued  95,200  shares of common stock to one
entity in  consideration  for $45,035 cash in reliance upon  Regulation S of the
Securities Act of 1933, as amended.

         On March 3,  2003,  we issued  20,000  shares of common  stock to three
individuals  in  consideration  for  services  rendered,  valued at $24,000,  in
reliance upon Section 4(2) of the Securities Act of 1933, as amended.

         On March 3,  2003,  we  issued  6,667  shares  of  common  stock to one
individual  for services  rendered,  valued at $7,867,  in reliance upon Section
4(2) under the Securities Act of 1933, as amended.

         On March 17,  2003,  we  issued  57,142  shares of common  stock to one
individual for services  rendered,  valued at $59,999,  in reliance upon Section
4(2) under the Securities Act of 1933, as amended.

         On March 26, 2003,  we issued  1,500,000  shares of common stock to one
investor for $375,000  cash ($0.25 per share),  in reliance upon Section 4(2) of
the Securities Act of 1933, as amended.

         On March 26,  2003,  we issued  408,496  shares of common  stock to one
investor for  approximately  $50,000 cash ($0.1224 per share),  in reliance upon
Regulation S of the Securities Act of 1933, as amended.

         On March 26,  2003,  we  issued  10,000  shares of common  stock to two
individuals  in  consideration  for  services  rendered,  valued at $12,000,  in
reliance upon Section 4(2) under the Securities Act of 1933, as amended.

         In April  2003,  we issued  350,000  shares of common  stock  valued at
$364,000 (based on the market price on the date of grant) for services rendered.
This  issuance  was exempt from  registration  pursuant  to Section  4(2) of the
Securities Act of 1933, as amended.

         On  April  1,  2003,  we  issued  7,000  shares  of  common  stock to a
consultant  for  services  valued at  $7,280.  This  issuance  was  exempt  from
registration pursuant to Section 4(2) of the Securities Act of 1933, as amended.

         On June 13,  2003,  we issued  450,000  shares  of  common  stock to an
investor for proceeds of $125,000.  This  issuance was exempt from  registration
pursuant to Section 4(2) of the Securities Act of 1933, as amended.

         Between April 1, 2003 and June 24, 2003, we issued a total of 4,216,213
shares of common  stock to various  investors  outside of the United  States for
cash proceeds of $587,660. These issuance were exempt from registration pursuant
to Regulation S of the Securities Act of 1933, as amended.

         In July 2003,  we issued  10,000 shares of common stock to a consultant
for services valued at $9,000.  This issuance was exempt from registration under
section 4(2) of the Securities Act of 1933, as amended.

         In August 2003, we issued 10,000 shares of common stock to a consultant
for services valued at $11,800. This issuance was exempt from registration under
section 4(2) of the Securities Act of 1933, as amended.

                                      II-3
In  September  2003,  we issued  10,000  shares  of  common  stock to a
consultant  for  services  valued at  $12,100.  This  issuance  was exempt  from
registration under section 4(2) of the Securities Act of 1933, as amended.

         In  September  2003,  we issued  50,000  shares  of common  stock to an
investor in exchange for  $25,000.  This  issuance was exempt from  registration
pursuant to Regulation S of the Securities Act of 1933, as amended.

         In  September  2003,  we issued  1,248,252  shares  of common  stock to
various  investors in  connection  with the exercise of warrants in exchange for
$153,000. These issuances were exempt from registration pursuant to Regulation S
of the Securities Act of 1933, as amended.

         Between October 2003 and December 2003, we issued to various  investors
2,740,008  shares of common  stock for an  aggregate  of  $735,885  cash.  These
issuances  were  exempt  from  registration  pursuant  to  Regulation  S of  the
Securities Act of 1933, as amended.

         In December  2003,  we issued  6,250,000  shares of common  stock to an
investor for $750,000.  This issuance was exempt from registration under section
4(2) of the Securities Act of 1933, as amended.

         In  October  2003,  we  issued  530,000  shares  of  common  stock to a
consultant in connection  with a cashless  exercise of a warrant.  This issuance
was exempt from  registration  under section 4(2) of the Securities Act of 1933,
as amended.

         In  October  2003,  we  issued  403,125  shares  of  common  stock to a
consultant in connection  with a cashless  exercise of a warrant.  This issuance
was exempt from  registration  under section 4(2) of the Securities Act of 1933,
as amended.

         In December  2003, we issued 5,000 shares of common stock to Stern & Co
Communications LLC in connection with a settlement agreement.  This issuance was
exempt from  registration  under section 4(2) of the  Securities Act of 1933, as
amended.

         In July  2003,  we  borrowed  $500,000  from  Pan  American  Management
pursuant to a subordinated convertible note. The note accrued interest at 7% per
annum.  In January  2004,  this note, in its  entirety,  was converted  into our
common stock at a conversion  price of $.30 per share.  This issuance was exempt
from registration under section 4(2) of the Securities Act of 1933, as amended.

         In May 2004,  we  issued  1,960,000  shares  of  common  stock to three
different shareholders,  as a result of a net exercise of warrants with a strike
price of $.0625 per share,  for  aggregate  gross  proceeds of  $122,500.  These
issuances were exempt from registration under section 4(2) of the Securities Act
of 1933, as amended.

         In June  2004,  we issued  3,105,262  shares  of common  stock to three
different shareholders,  as a result of a net exercise of warrants with a strike
price of $.0625 per share,  for aggregate gross proceeds of  $194,078.88.  These
issuances were exempt from registration under section 4(2) of the Securities Act
of 1933, as amended.

         In June 2004, we issued 2,156,250 shares of common stock as a result of
the conversion of a $250,000  principal  amount  convertible  debt at $.1224 per
share.  This  issuance was exempt from  registration  under  section 4(2) of the
Securities Act of 1933, as amended.

         On September  13, 2004,  we completed a private  placement  transaction
with 11  accredited  investors,  pursuant  to  which  we sold  an  aggregate  of
3,666,447 shares of common stock, 1,833,227 Series A Warrants,  1,833,227 Series
B Warrants and 1,833,227 Series C Warrants.  We received gross proceeds totaling
$1,649,900.10.  For each two shares of common stock,  we issued  investors one A
Warrant,  one B Warrant  and one C Warrant.  Each two shares and three  warrants
were  sold  at  a  price  of  $0.90.  The  private  placement  was  exempt  from
registration under Rule 506 of Regulation D under the Securities Act of 1933, as
amended.

PREFERRED STOCK

         We have not filed a  certificate  of  designation  with  respect to any
series of preferred  stock.  During the year ended June 30,  2003,  we agreed to
issue a total of 71,529  shares of Series A Preferred  Stock as  collateral  for
secured notes. The parties have  subsequently  agreed to cancel the transaction.
On December  31,  2003,  we agreed to issue  8,471  shares of Series A Preferred
Stock to two  stockholders of record in exchange for 3,325,000  shares of common
stock  of  Material  Technologies,  Inc.  On May 7,  2004,  we  entered  into an
agreement  whereby we exchanged the 3,325,000 shares of common stock of Material
Technologies,   Inc.  for  the  8,471  shares  of  Series  A  Preferred   Stock.
Accordingly,  as of May 7, 2004, no preferred  stock was

                                      II-4
issued or  outstanding.  All of these  issuances  were exempt from  registration
pursuant to Section 4(2) of the Securities Act of 1933, as amended.

CONVERTIBLE NOTES

         In July 2003, we borrowed  $200,000 under an existing  convertible note
payable,  which bears interest at 10% per annum. The issuance of the convertible
note was exempt from  registration  under Section 4(2) of the  Securities Act of
1933, as amended.

         In  November  2003,  we secured a $5 million  dollar  revolving  credit
facility, in the form of two seven-month  convertible notes. The issuance of the
convertible  notes  was  exempt  from  registration  under  Section  4(2) of the
Securities Act of 1933, as amended.

OPTIONS

         In May 2002,  we granted  options to purchase an aggregate of 6,480,000
shares  of common  stock at an  exercise  price of $0.31  per  share to  various
employees.  These option grants were exempt from registration under Section 4(2)
of the Securities Act of 1933, as amended. .

         In May 2002, we granted  options to purchase  300,000  shares of common
stock at an exercise price of $0.31 per share to Craig A. Hewitt. This grant was
exempt from  registration  under Section 4(2) of the  Securities Act of 1933, as
amended.

         In April 2003, we granted  options to purchase  25,000 shares of common
stock at an exercise  price of $1.02 per share valued at $15,000 to a consultant
for services  rendered.  This grant was exempt from  registration  under Section
4(2) of the Securities Act of 1933, as amended.

         In April 2003, we granted options to purchase  150,000 shares of common
stock at an exercise  price of $1.05 per share valued at $93,000 to a consultant
for services  rendered.  This grant was exempt from  registration  under Section
4(2) of the Securities Act of 1933, as amended.

         In April  2003,  we granted  options to  purchase  1,000,000  shares of
common  stock at an  exercise  price of $0.75 per share  valued at $655,000 to a
consultant for services rendered.  This grant was exempt from registration under
Section 4(2) of the Securities Act of 1933, as amended.

         On June 18,  2003,  we  issued to  various  employees  and  consultants
options to purchase  5,410,000  shares of common  stock at an exercise  price of
$.91 per share. These grants were exempt from registration under Section 4(2) of
the Securities Act, as amended.

         In July 2003, we issued to one individual  options to purchase  600,000
shares of common stock at an exercise  price of $1.54 per share.  This grant was
exempt from  registration  under Section 4(2) of the  Securities Act of 1933, as
amended.

WARRANTS

         From  December  2001 through May 2002,  we issued  warrants to purchase
3,724,292  shares of common stock at an exercise price of $0.08 per share to GTS
Gann  Trading,  ABN Amro,  BSI S.A.,  Lemanik,  Liba Vadura,  Miles  Busby,  and
Righetti Roberta, These issuances were exempt from registration under Regulation
S and/or Section 4(2) of the Securities Act of 1933, as amended.

         From February 2002 through June 2002, we issued warrants to purchase an
aggregate of 533,324 shares of common stock at exercise prices ranging from less
than  $0.001 to $0.06 per share to Dave  Stefano,  Rob De Losa,  ADG and  OTMCP.
These issuances were exempt from registration  under Regulation S and/or Section
4(2) of the Securities Act of 1933, as amended.

         From  April 2002  through  May 2002,  we issued  warrants  to  purchase
3,561,900  shares of common stock at an exercise price of $0.12 per share to ABN
Amro, BSI S.A., Lemanik,  Liba Vadura, Miles Busby, and Righetti Roberta.  These
issuances were exempt from  registration  under Regulation S and/or Section 4(2)
of the Securities Act of 1933, as amended.

         From April 2002  through  June 2002,  we granted  warrants  to purchase
3,332,100  shares of our  restricted  Common Stock at an exercise price of $0.12
per share in connection  with equity fund raising  activities  to ABN Amro,  BSI
S.A.,  Lemanik,  and Righetti Roberta.  The warrants vested on the date of grant
and are  exercisable  through  March  2007.  We  relied  on

                                      II-5
Regulation S as an exemption from registration under the Securities Act of 1934,
as amended, and under Section 4(2) of the Securities Act of 1933, as amended.

         From May 2002  through  June  2002,  we  issued  warrants  to  purchase
1,761,188  shares of  common  stock at an  exercise  price of $0.06 per share to
Southampton, Ltd. These issuances were exempt from registration under Regulation
S and/or Section 4(2) of the Securities Act of 1933, as amended.

         In May 2002,  we issued  warrants to purchase an aggregate of 2,000,000
shares of common stock at an exercise price of $.25 per share to two individuals
for  consulting  services in reliance upon Section 4(2) of the Securities Act of
1933, as amended.

         In May 2002, we issued warrants to purchase  1,200,000 shares of common
stock at an  exercise  price of $0.25  per  share,  in  connection  with a Shell
transaction,  to seven  individuals  (Thomas J. Howells,  Travis  Jenson,  Baure
Cosgrove,  Duane Jenson, James Doolin,  Jeffrey Jenson, and Leonard Burningham).
These issuances were exempt from registration  under Regulation S and/or Section
4(2) of the Securities Act of 1933, as amended.

         In  August  2002,  we issued  warrants  to  purchase  an  aggregate  of
3,244,000  shares of common stock at exercise prices ranging from $0.12 to $0.25
per share in connection  with equity fund raising  activities.  These  issuances
were exempt from  registration  under  Regulation  S and/or  Section 4(2) of the
Securities Act of 1933, as amended.

         In October  2002,  we issued  warrants  to  purchase  an  aggregate  of
1,320,000  shares of  common  stock at an  exercise  price of $0.06 per share in
connection with equity fund raising activities. These issuances were exempt from
registration  under  Regulation S and/or  Section 4(2) of the  Securities Act of
1933, as amended.

         In October  2002,  we issued  warrants  to  purchase  an  aggregate  of
2,973,937  shares of  common  stock at an  exercise  price of $0.12 per share in
connection with equity fund raising activities. These issuances were exempt from
registration  under  Regulation S and/or  Section 4(2) of the  Securities Act of
1933, as amended.

         In October 2002, we issued warrants to purchase an aggregate of 597,278
shares of common stock to one entity at an exercise  price of $0.24 per share in
connection with equity fund raising activities. These issuances were exempt from
registration  under  Regulation S and/or  Section 4(2) of the  Securities Act of
1933, as amended.

         In October  2002,  we issued  warrants  to purchase  250,000  shares of
common  stock at an  exercise  price of $1.04 per share,  valued at  $174,000 in
connection with the execution of a business  development grant agreement.  These
issuances were exempt from  registration  under Regulation S and/or Section 4(2)
of the Securities Act of 1933, as amended.

         In November 2002, we issued  warrants to purchase  1,000,000  shares of
common  stock at an  exercise  price of $0.25 per share,  valued at  $791,000 in
connection with the execution of a business  development grant agreement.  These
issuances were exempt from  registration  under Regulation S and/or Section 4(2)
of the Securities Act of 1933, as amended.

         In December  2002,  we issued  warrants to  purchase  40,000  shares of
common  stock at an  exercise  price of $1.40 per  share,  valued at  $20,000 in
connection  with the issuance of a note payable in the amount of $50,000.  These
issuances were exempt from  registration  under Regulation S and/or Section 4(2)
of the Securities Act of 1933, as amended.

         In December  2002,  we issued  warrants to  purchase  an  aggregate  of
536,608  shares  of  common  stock at an  exercise  price of $0.12  per share in
connection with equity fund raising activities. These issuances were exempt from
registration  under  Regulation S and/or  Section 4(2) of the  Securities Act of
1933, as amended.

         In December  2002,  we issued  warrants to  purchase  an  aggregate  of
816,994  shares  of  common  stock at an  exercise  price of $0.24  per share in
connection with equity fund raising activities. These issuances were exempt from
registration  under  Regulation S and/or  Section 4(2) of the  Securities Act of
1933, as amended.

         In December  2002,  we issued  warrants to  purchase  an  aggregate  of
1,758,994  shares of common stock at exercise prices of $0.12 to $0.24 per share
in connection with equity fund raising  activities.  These issuances were exempt
from  registration  under Regulation S and/or Section 4(2) of the Securities Act
of 1933, as amended.

         In  January  2003,  we issued  Ascendiant  Capital  Group  warrants  to
purchase 260,000 shares of common stock at an exercise price of $1.50 per share.
The warrants were issued in connection with a consulting agreement for services.
This issuance was exempt from  registration  under  Regulation S and/or  Section
4(2) of the Securities Act of 1933, as amended.

                                      II-6
In March 2003,  we issued on  individual  warrants to purchase  700,000
shares of common stock at exercise  prices ranging from $0.25 to $.80 per share.
The warrants were issued in connection with a consulting agreement for services.
These  issuances  were  exempt  from  registration  under  Section  4(2)  of the
Securities Act of 1933, as amended.

         On April 11, 2003, we issued to a consultant, in exchange for services,
a warrant to purchase  25,000  shares of common  stock at an  exercise  price of
$1.02 per share. This issuance was exempt from  registration  under Section 4(2)
of the Securities Act of 1933, as amended.

         On April 21, 2003, we issued to a consultant, in exchange for services,
a warrant to purchase  150,000  shares of common  stock at an exercise  price of
$1.05 per share. This issuance was exempt from  registration  under Section 4(2)
of the Securities Act of 1933, as amended.

         On June 19, 2003, we issued to a consultant,  in exchange for services,
a warrant to purchase  250,000  shares of common  stock at an exercise  price of
$.46 per share. This issuance was exempt from registration under Section 4(2) of
the Securities Act of 1933, as amended.

         On June 27, 2003 we issued to a consultant, in exchange for services, a
warrant to purchase  700,000  shares of common stock for services at an exercise
price of $.75 per share.  This  issuance  was  exempt  from  registration  under
Section 4(2) of the Securities Act of 1933, as amended.

         On June 30, 2003, we issued to a consultant,  in exchange for services,
a warrant  to  purchase  an  aggregate  of 15,000  shares of common  stock at an
exercise  price of $.75 per share.  This  issuance was exempt from  registration
under Section 4(2) of the Securities Act of 1933, as amended.

         Between May 26, 2003 and June 30, 2003, we issued to various  investors
warrants  to  purchase  an  aggregate  of  1,721,996  shares of common  stock at
exercise  prices ranging from $.1224 to $.35 per share in connection with equity
fund  raising  activities.  This  issuance  was exempt from  registration  under
Regulation S.

         Between July 2003 to  September  2003,  we issued to certain  investors
warrants  to  purchase  an  aggregate  of  3,219,969  shares of common  stock at
exercise  prices ranging from $0.12 to $.90 per share in connection  with equity
fund  raising  activities.  This  issuance  was exempt from  registration  under
Regulation S.

         In July 2003, we issued to a consultant a warrant to purchase 6,400,000
shares of common  stock at an exercise  price of $0.0625 per share for  services
valued at $200,000.  This  issuance was exempt from  registration  under Section
4(2) of the Securities Act of 1933, as amended.

         In July 2003,  we issued to a consultant a warrant to purchase  300,000
shares  of common  stock at an  exercise  price of $0.90 per share for  services
valued at $168,000.  This  issuance was exempt from  registration  under Section
4(2) of the Securities Act of 1933, as amended.

         Between October 2003 and December 2003, we issued to various  investors
warrants  to  purchase  an  aggregate  of  4,233,016  shares of common  stock at
exercise  prices  ranging from $.12 to $.35 per share in connection  with equity
fund  raising  activities.  This  issuance  was exempt from  registration  under
Regulation S.

         In  October  2003,  we  issued to a  consultant  warrants  to  purchase
1,000,000  shares of common stock at an exercise  price of $.06 per share.  This
issuance was exempt from  registration  under Section 4(2) of the Securities Act
of 1933, as amended.

         In  October  2003,  we  issued to a  consultant  warrants  to  purchase
5,000,000  shares of common stock at an exercise  price of $.06 per share.  This
issuance was exempt from  registration  under Section 4(2) of the Securities Act
of 1933, as amended.

         In  December  2003,  we issued to a  consultant  warrants  to  purchase
2,264,492  shares of common stock at an exercise price of $1.55 per share.  This
issuance was exempt from  registration  under Section 4(2) of the Securities Act
of 1933, as amended.

         In  December  2003,  we issued to a  consultant  warrants  to  purchase
6,793,478  shares of common stock at an exercise price of $1.55 per share.  This
issuance was exempt from  registration  under Section 4(2) of the Securities Act
of 1933, as amended.

                                      II-7
On September  13, 2004,  we completed a private  placement  transaction
with 11  accredited  investors,  pursuant  to  which  we sold  an  aggregate  of
3,666,668 shares of common stock, 1,833,334 Series A Warrants,  1,833,334 Series
B Warrants and 1,833,334 Series C Warrants.  We received gross proceeds totaling
$1,649,900.10.  For each two shares of common stock,  we issued  investors one A
Warrant,  one B Warrant  and one C Warrant.  Each two shares and three  warrants
were  sold  at  a  price  of  $0.90.  The  private  placement  was  exempt  from
registration under Rule 506 of Regulation D under the Securities Act of 1933, as
amended.

         During the  three-month  period ended  September  30,  2004,  we issued
18,806,248  shares of common  stock in  connection  with a cashless  exercise of
warrants. These warrants had originally been issued under a June 2002 consulting
agreement, and the aggregate value of the warrants is approximately  $1,175,000.
The  transaction  was  exempt  from  registration  under  Section  4(2)  of  the
Securities Act of 1933, as amended.

         During  October  2004  Hyde  Investments  converted  $200,000  of their
convertible  debt into 3,200,000  shares of common stock.  The  transaction  was
exempt from registration under Regulation S under the Securities Act of 1933, as
amended.

         In November, 2004, we completed a private placement transaction with 11
accredited investors, pursuant to which we sold an aggregate of 6,050,000 shares
of common stock, and 6,050,000  Series A warrants,  6,050,000 Series B warrants,
and 6,050,000 Series C warrants.  We received gross proceeds totaling  $605,000.
This private  placement  also  triggered a reset to exercise  prices of warrants
sold pursuant to the September 13, 2004 private  placement  described above. The
private  placement was exempt from  registration  under Rule 506 of Regulation D
under the Securities Act of 1933, as amended.

ITEM 16.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

         The  following  exhibits  are  included  as  part  of  this  Form  S-1.
References to "the Company" in this Exhibit List mean AccuPoll  Holding Corp., a
Nevada corporation.

EXHIBIT NUMBER                           DESCRIPTION
--------------------------------------------------------------------------------
2.1               Reorganization  Agreement dated April 9, 2003 between AccuPoll
                  and Z prompt,  Inc.  (Incorporated by reference from Exhibit 1
                  to Form 8-K, filed April 23, 2003)

2.2               Agreement  and Plan of  Reorganization  dated June 30, 2004 by
                  and among AccuPoll Holding Corp., NTSD Acquisition,  Inc., NTS
                  Data  Services  Corp.,  NTS Data  Services,  Inc.,  Matthew M.
                  Biondi and John F. Jennings  (Incorporated  by reference  from
                  Exhibit 10.1 to Form 8-K, filed July 1, 2004).

3.1               Articles of  Incorporation  (Incorporated  by  reference  from
                  Exhibit  3(i) to Form  10-KSB for  fiscal  year ended June 30,
                  2000)

3.2               Amendment to Articles of Incorporation  dated November 4, 1985
                  (Incorporated  by reference  from Exhibit 3(ii) to Form 10-KSB
                  for fiscal year ended June 30, 2000)

3.3               Certificate  of Amendment to Articles of  Incorporation  dated
                  May 2, 2002  (Incorporated  by  reference  from Exhibit 3.3 to
                  Form  10-K/A for the fiscal  year ended June 30,  2004,  filed
                  October 6, 2004)

3.4               Certificate  of Amendment to Articles of  Incorporation  dated
                  May 23, 2002  (Incorporated  by reference  from Exhibit 3.4 to
                  Form  10-K/A for the fiscal  year ended June 30,  2004,  filed
                  October 6, 2004)

3.5               Certificate  of Amendment to Articles of  Incorporation  dated
                  June 2, 2003  (Incorporated  by reference  from Exhibit 3.5 to
                  Form  10-K/A for the fiscal  year ended June 30,  2004,  filed
                  October 6, 2004)

3.6               Bylaws  (Incorporated  by reference to Exhibit  3(iii) to Form
                  10-KSB  for  the  fiscal  year  ended  June  30,  2000,  filed
                  September 8, 2000)

3.7               Amendment  to Bylaws  dated  April 20, 2000  (Incorporated  by
                  reference  to Exhibit  3.7 to Form  10-K/A for the fiscal year
                  ended June 30, 2004, filed October 6, 2004)

4.1               Debenture,  dated June 20, 2003 between AccuPoll and Palisades
                  Holdings,  LLC  (Incorporated by reference from Exhibit 4.1 to
                  Form  10-KSB/A for the fiscal year ended June 30, 2003,  filed
                  June 8, 2004)

4.2               Debenture,  dated  November 20, 2003, by and between  AccuPoll
                  Holding Corp.,  AccuPoll,  Inc. and Hyde Investments,  Ltd, as
                  amended  (Incorporated  by reference from Exhibit 10.1 to Form
                  10-Q/A for the quarter ended December 31, 2003,  filed June 8,
                  2004)

                                      II-8
EXHIBIT NUMBER                           DESCRIPTION
--------------------------------------------------------------------------------
4.3               Debenture,  dated  November 20, 2003, by and between  AccuPoll
                  Holding  Corp.,  AccuPoll,  Inc. and  Livingston  Investments,
                  Ltd., as amended  (Incorporated by reference from Exhibit 10.1
                  to Form 10-Q/A for the quarter ended December 31, 2003,  filed
                  June 8, 2004)

4.4               Convertible  Note,  dated July 2003,  between AccuPoll and Pan
                  American  Management  (Incorporated  by reference from Exhibit
                  10.1 to Form 10-Q/A for the quarter ended  September 30, 2003,
                  filed June 8, 2004)

4.5               Subscription Agreement,  dated September 8, 2004 (Incorporated
                  by reference from Exhibit 4.1 to Form 8-K, filed September 17,
                  2004)

4.6               Form of  Common  Stock  Purchase  Warrant A  (Incorporated  by
                  reference  from Exhibit 4.2 to Form 8-K,  filed  September 17,
                  2004)

4.7               Form of  Common  Stock  Purchase  Warrant B  (Incorporated  by
                  reference  from Exhibit 4.3 to Form 8-K,  filed  September 17,
                  2004)

4.8               Form of  Common  Stock  Purchase  Warrant C  (Incorporated  by
                  reference  from Exhibit 4.4 to Form 8-K,  filed  September 17,
                  2004)

4.9               Form of Placement  Agent  Warrant  (Incorporated  by reference
                  from Exhibit 4.5 to Form 8-K, filed September 17, 2004)

4.10              Form of Funds Escrow Agreement (Incorporated by reference from
                  Exhibit 4.6 to Form 8-K, filed September 17, 2004)

4.11              Subscription  Agreement,  dated November 4, 2004 (Incorporated
                  by reference  from Exhibit 4.1 to Form 8-K, filed November 10,
                  2004)

4.12              Form of  Common  Stock  Purchase  Warrant A  (Incorporated  by
                  reference  from  Exhibit 4.1 to Form 8-K,  filed  November 10,
                  2004)

4.13              Form of  Common  Stock  Purchase  Warrant B  (Incorporated  by
                  reference  from  Exhibit 4.1 to Form 8-K,  filed  November 10,
                  2004)

4.14              Form of  Common  Stock  Purchase  Warrant C  (Incorporated  by
                  reference  from  Exhibit 4.1 to Form 8-K,  filed  November 10,
                  2004)

4.15              Form of Placement  Agent  Warrant  (Incorporated  by reference
                  from Exhibit 4.1 to Form 8-K, filed November 10, 2004)

4.16              Form of Funds Escrow Agreement (Incorporated by reference from
                  Exhibit 4.1 to Form 8-K, filed November 10, 2004)

5.1               Opinion of Sichenzia Ross Friedman Ference LLP

9.1               Proxy in favor of Dennis  Vadura and Frank Wiebe from Picasso,
                  LLC  (Incorporated  by reference from Exhibit 10.9 to the Form
                  10-KSB for the fiscal year ended June 30, 2002,  filed October
                  7, 2002)

9.2               Proxy  in  favor  of  Dennis   Vadura  and  Frank  Wiebe  from
                  ViperTrust  (Incorporated  by reference  from Exhibit 10.10 to
                  the Form 10-KSB for the fiscal year ended June 30, 2002, filed
                  October 7, 2002)

9.3               Proxy in favor of Dennis  Vadura and Frank  Wiebe from  Aramis
                  Investment, LLC (Incorporated by reference from Exhibit 9.3 to
                  Form  10-KSB/A for the fiscal year ended June 30, 2003,  filed
                  June 8, 2004)

9.4               Proxy in favor of  Dennis  Vadura  and  Frank  Wiebe  from The
                  Glacier Trust  (Incorporated  by reference from Exhibit 9.4 to
                  Form  10-KSB/A for the fiscal year ended June 30, 2003,  filed
                  June 8, 2004)

9.5               Proxy in favor of Dennis  Vadura and Frank Wiebe from Morpheus
                  Trust  (Incorporated  by  reference  from  Exhibit 9.5 to Form
                  10-KSB/A for the fiscal year ended June 30,  2003,  filed June
                  8, 2004)

10.1              Stock Exchange  Agreement dated May 20, 2002, between WIPC and
                  AccuPoll, Inc., Dennis Vadura and Frank Wiebe (Incorporated by
                  reference from Exhibit 1 to Form 8-K/A filed May 28, 2002)

10.2              Employment  Agreement,  dated  May 20,  2002,  between  Dennis
                  Vadura and AccuPoll  (Incorporated  by reference  from Exhibit
                  10.2 to Form 10-KSB/A for the fiscal year ended June 30, 2003,
                  filed June 8, 2004)

10.3              Employment Agreement,  dated May 20, 2002, between Frank Wiebe
                  and AccuPoll  (Incorporated  by reference from Exhibit 10.2 to
                  Form  10-KSB/A for the fiscal year ended June 30, 2003,  filed
                  June 8, 2004)

10.4              Indemnification Agreement,  between Dennis Vadura and AccuPoll
                  (Incorporated  by reference from Exhibit 10.13 to the Form-KSB
                  for fiscal year ended June 30, 2002, filed October 7, 2002)

10.5              Indemnification  Agreement,  between  Frank Wiebe and AccuPoll
                  (Incorporated  by reference from Exhibit 10.14 to the Form-KSB
                  for fiscal year ended June 30, 2002, filed October 7, 2002)

                                      II-9
EXHIBIT NUMBER                           DESCRIPTION
--------------------------------------------------------------------------------
10.6              Master  Services  Agreement  dated  April  2002 with Web Tools
                  International,  Inc.  (Incorporated  by reference from Exhibit
                  10.7 to Form-KSB  for fiscal year ended June 30,  2002,  filed
                  October 7, 2002)

10.7              Consulting Agreement dated April 23, 2002 between AccuPoll and
                  GCH Capital,  Ltd (Incorporated by reference from Exhibit 10.8
                  to Form-KSB for fiscal year ended June 30, 2002, filed October
                  7, 2002)

10.8              Consulting Agreement, dated May 29, 20002 between Craig Hewitt
                  and AccuPoll  (Incorporated by reference from Exhibit 10.17 to
                  the  Form-KSB  for  fiscal  year ended  June 30,  2002,  filed
                  October 7, 2002)

10.9              AccuPoll 2002 Consultant  Compensation  Plan  (Incorporated by
                  reference from Exhibit 10 to Form S-8 filed June 11, 2002)

10.10             Exclusive  Territory and Compensation  Agreement,  November 4,
                  2003, by and between AccuPoll and AmCad, LLC  (Incorporated by
                  reference  from Exhibit  10.12 to Form 10-KSB/A for the fiscal
                  year ended June 30, 2003, filed June 8, 2004)

10.11             Standard Sublease dated July 23, 2003 between Greenberg Farrow
                  Architecture,  Inc.  and AccuPoll  (Incorporated  by reference
                  from Exhibit  10.14 to Form 10-KSB/A for the fiscal year ended
                  June 30, 2003, filed June 8, 2004)

10.12             Teaming Agreement dated July 9, 2004, by and between AccuPoll,
                  Inc. and Alternative  Resources  Corporation  (Incorporated by
                  reference  from Exhibit 10.12 to Form 10-K for the fiscal year
                  ended June 30, 2004, filed September 28, 2004)

10.13             Exclusive  Supply  Agreement  dated  December  20, 2001 by and
                  between Source Technologies, Inc. and Web Tools International,
                  Inc.  (Incorporated  by reference  from Exhibit  10.13 to Form
                  10-K for the fiscal year ended June 30, 2004,  filed September
                  28, 2004)

21.1              List of Subsidiaries  (Incorporated  by reference from Exhibit
                  21.1 to Form 10-K for the fiscal  year  ended  June 30,  2004,
                  filed September 28, 2004)

23.1              Consent of Sichenzia  Ross  Friedman  Ference LLP (Included in
                  Exhibit 5.1)

23.2              Consent of Squar, Milner, Reehl & Williamson, LLP

24.1              Powers of Attorney (Included in signature page)

ITEM 17.  UNDERTAKINGS.

(a)  The undersigned Registrant hereby undertakes:

     1.   To file,  during any period in which offers or sales are being made, a
          post-effective amendment to this Registration Statement:

          (i)  to include any  prospectus  required  by Section  10(a)(3) of the
               Securities Act of 1933, as amended;

          (ii) to reflect in the  prospectus  any facts or events  arising after
               the  effective  date of the  Registration  Statement (or the most
               recent post-effective amendment thereof),  which, individually or
               in  the  aggregate,   represent  a  fundamental   change  in  the
               information   set   forth   in   the   Registration    Statement.
               Notwithstanding the foregoing, any increase or decrease in volume
               of  securities  offered (if the total dollar value of  securities
               offered  would not  exceed  that  which was  registered)  and any
               deviation  from  the low or  high  end of the  estimated  maximum
               offering  range may be reflected in the form of prospectus  filed
               with the Commission pursuant to Rule 424(b) if, in the aggregate,
               the  changes  in volume  and price  represent  no more than a 20%
               change in the maximum  aggregate  offering price set forth in the
               "Calculation  of   Registration   Fee"  table  in  the  effective
               registration statement; and

          (iii)to include any material  information  with respect to the plan of
               distribution   not  previously   disclosed  in  the  Registration
               Statement  or any  material  change  to such  information  in the
               Registration Statement,

     2.   That,  for  the  purpose  of  determining   any  liability  under  the
          Securities Act of 1933, as amended, each such post-effective amendment
          shall be deemed to be a new  registration  statement  relating  to the
          securities  offered  therein,  and the offering of such  securities at
          that  time  shall be  deemed  to be the  initial  bona  fide  offering
          thereof.

     3.   To remove from registration by means of a post-effective amendment any
          of  the  securities  being  registered  which  remain  unsold  at  the
          termination of the offering.

     4.   The undersigned  Registrant  hereby  undertakes  that, for purposes of
          determining  any  liability  under  the  Securities  Act

                                     II-10
of 1933,  as amended,  each filing of the  Registrant's  Annual Report
          pursuant to Section 13(a) or Section 15(d) of the Securities  Exchange
          Act of 1934,  as amended,  that is  incorporated  by  reference in the
          Registration  Statement  shall  be  deemed  to be a  new  registration
          statement relating to the securities offered therein, and the offering
          of such securities at that time shall be deemed to be the initial bona
          fide offering thereof.

     5.   Insofar  as   indemnification   for  liabilities   arising  under  the
          Securities  Act of 1933,  as amended (the "Act"),  may be permitted to
          directors, officers and controlling persons of the Registrant pursuant
          to the foregoing  provisions,  or otherwise,  the  Registrant has been
          advised that in the opinion of the Securities and Exchange  Commission
          such  indemnification is against public policy as expressed in the Act
          and is,  therefore,  unenforceable.  In the  event  that a  claim  for
          indemnification  against such  liabilities  (other than the payment by
          the Registrant of expenses incurred or paid by a director,  officer or
          controlling  person of the Registrant 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,
          the Registrant  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 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.

     6.   The undersigned registrant hereby undertakes to deliver or cause to be
          delivered with the  prospectus,  to each person to whom the prospectus
          is sent or given, the latest annual report to security holders that is
          incorporated by reference in the prospectus and furnished  pursuant to
          and  meeting  the  requirements  of Rule 14a-3 or Rule 14c-3 under the
          Securities   Exchange  Act  of  1934;  and,  where  interim  financial
          information  required to be presented by Article 3 of Regulations  S-X
          are not set  forth  in the  prospectus,  to  deliver,  or  cause to be
          delivered to each person to whom the prospectus is sent or given,  the
          latest quarterly report that is specifically incorporated by reference
          in the prospectus to provide such interim financial information.

                                     II-11
SIGNATURES

         Pursuant  to the  requirements  of the  Securities  Act  of  1933,  the
registrant  has duly  caused  this  registration  statement  to be signed on its
behalf by the  undersigned,  thereunto  duly  authorized  in the City of Tustin,
State of California, on January 21, 2005.

                                         ACCUPOLL HOLDING CORP.

                                By:      /s/ Dennis Vadura
                                         -----------------------------------
                                         Dennis Vadura,
                                         Chief Executive Officer and Director

                                By:      /s/ Frank J. Wiebe
                                         -----------------------------------
                                         Frank J. Wiebe,
                                         President, Secretary, Treasurer
                                         and Director

                                By:      /s/ Craig A. Hewitt
                                         -----------------------------------
                                         Craig A. Hewitt,
                                         Chief Financial Officer and Principal
                                         Accounting Officer

                                POWER OF ATTORNEY

         Each person whose  signature  appears  below  constitutes  and appoints
Dennis Vadura,  Frank J. Wiebe and Craig A. Hewitt,  or either of them, his true
and  lawful  attorney-in-fact  and  agent,  acting  alone,  with full  powers of
substitution  and  resubstitution,  for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments)  to this  Registration  Statement,  any  Amendments  thereto and any
Registration  Statement  of the same  offering  which is  effective  upon filing
pursuant to Rule 462(b) under the Securities Act, and to file the same, with all
exhibits  thereto,  and  other  documents  in  connection  therewith,  with  the
Commission,  granting unto said  attorney-in-fact  and agent, each acting alone,
full  powers  and  authority  to do and  perform  each and  every  act and thing
requisite and  necessary to be done in and about the  premises,  as fully to all
intents and  purposes as he might or could do in person,  hereby  ratifying  and
confirming all said  attorney-in-fact and agent, acting alone, or his substitute
or substitutes, may lawfully do or cause to be done by virtue hereof.

         Pursuant  to the  requirements  of the  Securities  Act of  1933,  this
registration  statement  has  been  signed  by  the  following  persons  in  the
capacities and on the dates indicated:
SIGNATURE                    TITLE                                       DATE
/s/ Dennis Vadura                Chief Executive Officer and Director        January 21, 2005
----------------------------------
         Dennis Vadura

     /s/ Frank J. Wiebe               President, Secretary, Treasurer             January 21, 2005
----------------------------------    and Director
         Frank J. Wiebe

     /s/ Andrea M. Porcelli           Director                                    January 21, 2005
----------------------------------
         Andrea M. Porcelli

     /s/ Phil Trubey                  Director                                    January 21, 2005
----------------------------------
         Phil Trubey
II-12