As filed with the Securities and Exchange Commission
                                                            on November 22, 2004
                                      An Exhibit List can be found on page II-6.
                                                   Registration No. 333-________



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


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

                           QUINTEK TECHNOLOGIES, INC.
                 (Name of small business issuer in its charter)

   California                      7389                       77-0505346
---------------       ----------------------------       -------------------
(State or other       (Primary Standard Industrial        (I.R.S. Employer
Jurisdiction of        Classification  Code Number)      Identification No.)
Incorporation or                                        
Organization)                                     

                               17951 Lyons Circle
                       Huntington Beach, California 92647
                                 (714) 848-7741
          ------------------------------------------------------------
          (Address and telephone number of principal executive offices
                        and principal place of business)


                     Robert Steele, Chief Executive Officer
                           QUINTEK TECHNOLOGIES, INC.
                               17951 Lyons Circle
                       Huntington Beach, California 92647
                                 (714) 848-7741
            ---------------------------------------------------------
            (Name, address and telephone number of agent for service)

                                   Copies to:
                             Gregory Sichenzia, Esq.
                       Sichenzia Ross Friedman Ference LLP
                     1065 Avenue of the Americas, 21st Flr.
                            New York, New York 10018
                                 (212) 930-9700
                              (212) 930-9725 (fax)

                APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC:

     From time to time after this Registration Statement becomes effective.


If any 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, other
than   securities   offered  only  in  connection   with  dividend  or  interest
reinvestment plans, 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,  check the following box and list the
Securities  Act  registration   statement   number  of  the  earlier   effective
registration statement for the same offering. [ ]

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

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

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

                                       ii



                         CALCULATION OF REGISTRATION FEE

------------------------------- -------------------- ---------------- ------------------ --------------------
   Title of each class of          Amount to be         Proposed          Proposed           Amount of
 securities to be registered      registered (1)        maximum           maximum         registration fee
                                                        offering         aggregate
                                                       price per       offering price
                                                         share
------------------------------- -------------------- ---------------- ------------------ --------------------
                                                                                            
   Common stock, no par value       20,625,000 (2)      $.24 (3)            $4,950,000              $627.17
  issuable upon conversion of
      debentures (Golden Gate
                   Investors)
------------------------------- -------------------- ---------------- ------------------ --------------------
   Common Stock, no par value        3,000,000 (4)     $1.00 (5)            $3,000,000              $380.10
    issuable upon exercise of
        warrants (Golden Gate
                   Investors)
------------------------------- -------------------- ---------------- ------------------ --------------------
   Common stock, no par value              200,000      $.24 (3)               $48,000                $6.08
            (Bernadette Haag)
------------------------------- -------------------- ---------------- ------------------ --------------------
   Common Stock, no par value              200,000      $.24 (3)               $48,000                $6.08
    issuable upon exercise of
   warrants (Bernadette Haag)
------------------------------- -------------------- ---------------- ------------------ --------------------
   Common stock, no par value            2,200,000      $.24 (3)              $528,000               $66.90
  issuable upon conversion of
           note (David Gough)
------------------------------- -------------------- ---------------- ------------------ --------------------
   Common Stock, no par value            2,200,000      $.24 (3)              $528,000               $66.90
    issuable upon exercise of
       warrants (David Gough)
------------------------------- -------------------- ---------------- ------------------ --------------------
   Common stock, no par value              500,000      $.24 (3)              $120,000               $15.20
                (Roger Lents)
------------------------------- -------------------- ---------------- ------------------ --------------------
   Common Stock, no par value            1,000,000      $.24 (3)              $240,000               $30.41
    issuable upon exercise of
       warrants (Roger Lents)
------------------------------- -------------------- ---------------- ------------------ --------------------
   Common Stock, no par value            1,000,000      $.24 (3)              $240,000               $30.41
             (Stan Merdinger)
------------------------------- -------------------- ---------------- ------------------ --------------------
   Common Stock, no par value            1,000,000      $.24 (3)              $240,000               $30.41
    issuable upon exercise of
    warrants (Stan Merdinger)
------------------------------- -------------------- ---------------- ------------------ --------------------
   Common Stock, no par value              500,000      $.24 (3)              $120,000               $15.20
             (Rayne Forecast)
------------------------------- -------------------- ---------------- ------------------ --------------------
   Common Stock, no par value              500,000      $.24 (3)              $120,000               $15.20
    issuable upon exercise of
    warrants (Rayne Forecast)
------------------------------- -------------------- ---------------- ------------------ --------------------
   Common stock, no par value            9,166,667      $.24 (3)         $2,200,000.08              $278.74
  issuable upon conversion of
      notes (Kazi Management)
------------------------------- -------------------- ---------------- ------------------ --------------------

                                      iii



------------------------------- -------------------- ---------------- ------------------ --------------------
                                                                                            
   Common Stock, no par value            9,166,667      $.24 (3)         $2,200.000.08              $278.74
    issuable upon exercise of
   warrants (Kazi Management)
------------------------------- -------------------- ---------------- ------------------ --------------------
   Common Stock, no par value            5,000,000      $.24 (3)            $1,200,000              $152.04
    issuable upon exercise of
    warrants (Gerald Hannahs)
------------------------------- -------------------- ---------------- ------------------ --------------------
                        Total           56,258,334                      $15,782,000.16           $1,999.58
------------------------------- -------------------- ---------------- ------------------ --------------------

(1) Includes  shares of our common stock,  no par value per share,  which may be
offered pursuant to this registration statement,  which shares are issuable upon
conversion of  convertible  debentures  and the exercise of warrants held by the
selling  stockholder.  In  addition  to the shares  set forth in the table,  the
amount to be registered includes an indeterminate number of shares issuable upon
conversion of the debentures and exercise of the warrants, as such number may be
adjusted as a result of stock splits,  stock dividends and similar  transactions
in  accordance  with Rule 416. The number of shares of common  stock  registered
hereunder  represents  a good  faith  estimate  by us of the number of shares of
common stock issuable upon conversion of the debentures and upon exercise of the
warrants.  For purposes of estimating the number of shares of common stock to be
included in this registration  statement, we calculated a good faith estimate of
the number of shares of our common stock that we believe  will be issuable  upon
conversion  of the  debentures  and upon exercise of the warrants to account for
market  fluctuations,   and  antidilution  and  price  protection   adjustments,
respectively.  Should the  conversion  ratio  result in our having  insufficient
shares,  we will not rely  upon  Rule  416,  but  will  file a new  registration
statement  to cover the resale of such  additional  shares  should  that  become
necessary.  In addition,  should a decrease in the exercise price as a result of
an issuance or sale of shares below the then current market price, result in our
having insufficient  shares, we will not rely upon Rule 416, but will file a new
registration statement to cover the resale of such additional shares should that
become necessary.

(2)  Includes  a good  faith  estimate  of  the  shares  underlying  convertible
debentures to account for market fluctuations.

(3)  Estimated  solely for  purposes  of  calculating  the  registration  fee in
accordance with Rule 457(c) 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
November 16, 2004, which was $.24 per share.

(4) Includes a good faith estimate of the shares underlying warrants exercisable
at $1.00 per share to account for antidilution and price protection adjustments.

(5)  Estimated  solely for  purposes  of  calculating  the  registration  fee in
accordance with Rule 457(g) under the Securities Act of 1933, using the exercise
price of $1.00.

         The registrant hereby amends this  registration  statement on such date
or dates as may be necessary to delay its  effective  date until the  registrant
shall file a further amendment which specifically  states that this registration
statement shall  thereafter  become effective in accordance with Section 8(a) of
the  Securities  Act of 1933 or until the  registration  statement  shall become
effective on such date as the commission,  acting pursuant to said Section 8(a),
may determine.

                                       1

 
PRELIMINARY PROSPECTUS SUBJECT TO COMPLETION, DATED NOVEMBER 22, 2004

                           QUINTEK TECHNOLOGIES, INC.
                              56,258,334 SHARES OF
                                  COMMON STOCK

         This prospectus relates to the resale by the selling stockholders of up
to 56,258,334 shares of our common stock,  including  2,200,000 shares of common
stock,  up  to  20,625,000   shares  of  common  stock  underlying   convertible
debentures, up to 11,366,667 shares of common stock underlying convertible notes
and up to 22,066,667  shares issuable upon the exercise of common stock purchase
warrants.  The  convertible  debentures are  convertible  into the number of our
shares of common stock equal to the  principal  amount of the  debentures  being
converted  multiplied by 11, less the product of the conversion price multiplied
by ten  times the  dollar  amount.  The  conversion  price  for the  convertible
debentures  is the  lesser of (i)  $0.50 or (ii)  eighty  percent  of the of the
average of the five lowest volume weighted average prices during the twenty (20)
trading days prior to the conversion.  If the volume  weighted  average price is
below $0.10 on a conversion date, we have the right to pre-pay the amount of the
debenture the holder  elects to convert,  plus accrued and unpaid  interest,  at
125% of such  amount;  however,  if we elect to pre-pay in this  situation,  the
debenture  holder has the right to withdraw the notice of  conversion.  Also, if
the volume  weighted  average  price is below $0.10 at any point during a month,
the holder is not obligated to convert any portion of the debenture  during that
month.

         Additionally,   $200,000  in  convertible  notes,  plus  interest,   is
convertible  into shares of our common stock at a conversion  price of $0.10 per
share.  $500,000 in convertible notes, plus interest, is convertible into shares
of our  common  stock  at a  conversion  price of $0.06  per  share.  14,166,667
warrants are exercisable at $0.10 per share;  2,700,000 warrants are exercisable
at $0.12 per  share,  1,000,000  warrants  are  exercisable  at $0.13 per share,
1,200,000 warrants are exercisable at $0.15 per share and 3,000,000 warrants are
exercisable at $1.00 per share.

         The selling stockholders may sell common stock from time to time in the
principal market on which the stock is traded at the prevailing  market price or
in  negotiated  transactions.  Some of the  selling  stockholders  may be deemed
underwriters of the shares of common stock, which they are offering. We will pay
the expenses of registering these shares.

         Our common stock is registered  under  Section 12(g) of the  Securities
Exchange Act of 1934 and is listed on the Over-The-Counter  Bulletin Board under
the symbol  "QTEK".  The last reported sales price per share of our common stock
as reported by the  Over-The-Counter  Bulletin  Board on November 19, 2004,  was
$0.24.

Investing in these  securities  involves  significant  risks. See "Risk Factors"
beginning on page 4.

         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 date of this prospectus is _______, 2004.

         The  information in this Prospectus is not complete and may be changed.
This  Prospectus  is included in the  Registration  Statement  that was filed by
Quintek  Technologies,  Inc., 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 sale is not permitted.
                                       2

                             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.

                           QUINTEK TECHNOLOGIES, INC.

         We have been a  manufacturer  of hardware  and  software  and a service
provider  to the  corporate  and  public  sector  markets  since  1991.  Our new
division,  Quintek Services, Inc. delivers business process outsourcing services
and information  lifecycle management solutions to document intensive industries
such as healthcare and financial services. The solutions and services we provide
enable  organizations  to secure  and  manage  their  information  and  document
business processes more efficiently.

         Through  Quintek  Services,  we provide  business  process  outsourcing
services to Fortune 500, Russell 2000 companies and public sector organizations.
Our business process  outsourcing  services range from the digitizing,  indexing
and uploading of source documents through simple customer-specific,  rules-based
decision making.

         We also sell hardware,  software and services for printing large format
drawings  such as  blueprints  and computer  aided design files  directly to the
microfilm format of aperture cards.

         For the three months ended September 30, 2004, we generated  revenue in
the amount of $114,266 and a net loss of $1,195,241. For the year ended June 30,
2004, we generated revenue in the amount of $298,653 and a net loss of $998,531.
As a  result  of  recurring  losses  from  operations  (accumulated  deficit  of
$23,061,065), including net losses of $998,531 and $701,052 for the fiscal years
ending June 30, 2004 and 2003,  respectively,  our independent registered public
accounting  firm,  in their report dated  September  21,  2004,  have  expressed
substantial doubt about our ability to continue as a going concern.

         Our  principal  offices are located at 17951 Lyons  Circle,  Huntington
Beach,  California  92647, and our telephone number is (714) 848-7741.  We are a
California corporation.

          
The Offering

Common stock offered by selling stockholders.....   Up to 56,258,334 shares,
                                                    including the following:

                              -  up  to   20,625,000   shares  of  common  stock
                                 underlying   convertible   debentures   in  the
                                 principal  amount of $300,000  (includes a good
                                 faith   estimate   of  the  shares   underlying
                                 convertible  debentures  to account  for market
                                 fluctuations  antidilution and price protection
                                 adjustments, respectively),

                              -  up to 3,000,000 shares of common stock issuable
                                 upon the  exercise  of  common  stock  purchase
                                 warrants  at an  exercise  price of  $1.00  per
                                 share  (includes  a good faith  estimate of the
                                 shares  underlying   warrants  to  account  for
                                 antidilution and price protection  adjustments,
                                 respectively);

                                       3


                              -  up  to   11,366,667   shares  of  common  stock
                                 underlying  convertible  notes in the principal
                                 amount of $700,000 plus accrued interest;

                              -  2,200,000 shares of common stock;

                              -  up  to   14,166,667   shares  of  common  stock
                                 issuable  upon the  exercise  of  common  stock
                                 purchase warrants at an exercise price of $0.10
                                 per share;

                              -  up to 2,700,000 shares of common stock issuable
                                 upon the  exercise  of  common  stock  purchase
                                 warrants  at an  exercise  price of  $0.12  per
                                 share;

                              -  up to 1,000,000 shares of common stock issuable
                                 upon the  exercise  of  common  stock  purchase
                                 warrants  at an  exercise  price of  $0.13  per
                                 share; and

                              -  up to 1,200,000 shares of common stock issuable
                                 upon the  exercise  of  common  stock  purchase
                                 warrants  at an  exercise  price of  $0.15  per
                                 share.

                                                                               
                                 This number represents 44.08%  of  our  current
                                 outstanding stock.

Common stock to be outstanding 
after the offering ............  Up to 127,632,334 shares

Use of proceeds ...............  We will not receive any proceeds  from the sale
                                 of the common stock.  However,  we will receive
                                 up  to  $5,050,666.70   upon  exercise  of  the
                                 warrants by the selling stockholders. We expect
                                 to use the proceeds  received from the exercise
                                 of the  warrants,  if any, for general  working
                                 capital  purposes.  We received an aggregate of
                                 $300,000 in connection with the issuance of the
                                 convertible    debenture    and   $700,000   in
                                 connection with the issuance of the convertible
                                 notes to the selling stockholders.  We used the
                                 $1,000,000  for  the  general  working  capital
                                 purposes and the payment of professional fees.

Over-The-Counter 
Bulletin Board Symbol..........  QTEK

         The above  information  regarding common stock to be outstanding  after
the offering is based on  73,574,000  shares of common stock  outstanding  as of
November  18,  2004  and  assumes  the  subsequent   conversion  of  our  issued
convertible  debentures  and  convertible  notes and exercise of warrants by our
selling stockholders.

         To  obtain  funding  for our  ongoing  operations,  we  entered  into a
Securities  Purchase Agreement with an accredited investor on August 4, 2004 for
the sale of (i)  $300,000 in  convertible  debentures  and (ii)  warrants to buy
3,000,000 shares of our common stock.  This prospectus  relates to the resale of
the common stock underlying these convertible debentures and warrants.

                                       4


         The investors are obligated to provide us with an aggregate of $300,000
as follows:

         o    $175,000 was disbursed to us on August 4, 2004;

         o    $50,000 has been retained for services  provided to our company by
              various professionals, which shall be disbursed upon effectiveness
              of this  registration  statement;  and 
         o    $75,000 will be released upon  effectiveness of this  registration
              statement.

         The debentures bear interest at 5 3/4%,  mature two years from the date
of  issuance,  and  are  convertible  into  our  common  stock,  at the  selling
stockholder's option. The convertible debentures are convertible into the number
of our shares of common stock equal to the  principal  amount of the  debentures
being  converted  multiplied  by 11,  less the product of the  conversion  price
multiplied by ten times the dollar amount of the debenture. The conversion price
for the convertible  debenture is the lesser of (i) $0.50 or (ii) eighty percent
of the of the average of the five lowest volume  weighted  average prices during
the twenty (20) trading  days prior to the  conversion.  If the volume  weighted
average price is below $0.10 on a conversion  date, we have the right to pre-pay
the amount of the  debenture  the holder  elects to  convert,  plus  accrued and
unpaid interest, at 125% of such amount; however, if we elect to pre-pay in this
situation,  the  debenture  holder  has the  right to  withdraw  the  notice  of
conversion.  Also,  if the volume  weighted  average price is below $0.10 at any
point during a month,  the holder is not obligated to convert any portion of the
debenture  during  that  month.  Accordingly,  there  is in fact no limit on the
number of shares into which the  debenture may be  converted.  In addition,  the
selling  stockholder is obligated to exercise the warrant  concurrently with the
submission  of a conversion  notice by the selling  stockholder.  The warrant is
exercisable  into 3,000,000 shares of common stock at an exercise price of $1.00
per share.

         The  selling  stockholder  has  contractually  agreed to  restrict  its
ability to convert or exercise  its  warrants  and receive  shares of our common
stock  such that the  number of  shares of common  stock  held by them and their
affiliates  after such  conversion  or exercise does not exceed 4.9% of the then
issued and outstanding  shares of common stock.  See the "Selling  Stockholders"
and "Risk  Factors"  sections  for a  complete  description  of the  convertible
debentures.

         To obtain  funding for our ongoing  operations,  we also  entered  into
several Note Purchase Agreements with several accredited  investors for the sale
of $770,000 in convertible notes. The convertible notes bear interest at 10% per
annum,  and mature one year from the date of  issuance.  $70,000 in  convertible
notes have been converted  into 700,000 shares of our common stock.  $200,000 in
convertible  notes, plus interest,  is convertible into our common stock, at the
selling stockholder's option at a conversion price of $0.10 per shares. $500,000
in convertible  notes,  plus interest,  is convertible into our common stock, at
the selling  stockholder's  option at a conversion price of $0.06 per shares. In
connection  therewith,  we issued an aggregate of 12,066,667 warrants.  Of these
warrants,  9,166,667  warrants  are  exercisable  at $0.10 per share;  2,200,000
warrants are exercisable at $0.12 per share and 700,000 warrants are exercisable
at $0.15 per share.  This  prospectus  relates to the resale of the common stock
underlying  these  convertible  notes and warrants.  

                                       5

                                  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.  If any of the following  risks actually occur,
our business,  operating results and financial condition could be harmed and the
value of our stock  could go down.  This  means you could  lose all or a part of
your investment.

Risks Relating to Our Business:
-------------------------------

We Have a History of Losses Which May Continue,  Requiring Us to Seek Additional
Sources of Capital Which May Not be Available,  Requiring Us to Curtail or Cease
Operations
--------------------------------------------------------------------------------
         We had a net loss of $998,531 for the year ended June 30, 2004 compared
to a net loss of $701,053 for the fiscal year ended June 30, 2003. For the three
months ended September 30, 2004, we incurred a net loss of $1,195,241. We cannot
assure you that we can achieve or sustain profitability on a quarterly or annual
basis in the future.  If revenues  grow more  slowly than we  anticipate,  or if
operating expenses exceed our expectations or cannot be adjusted accordingly, we
will  continue to incur  losses.  We will  continue to incur losses until we are
able to establish  significant  sales of our software and hardware  products and
our business  process  outsourcing  services.  Our possible success is dependent
upon the successful  development and marketing of our services and products,  as
to which  there is no  assurance.  Any future  success  that we might enjoy will
depend upon many factors,  including  factors out of our control or which cannot
be predicted  at this time.  These  factors may include  changes in or increased
levels  of  competition,  including  the  entry of  additional  competitors  and
increased  success  by  existing   competitors,   changes  in  general  economic
conditions, increases in operating costs, including costs of supplies, personnel
and  equipment,  reduced  margins  caused  by  competitive  pressures  and other
factors.  These  conditions may have a materially  adverse effect upon us or may
force  us to  reduce  or  curtail  operations.  In  addition,  we  will  require
additional  funds to  sustain  and expand  our sales and  marketing  activities,
particularly if a well-financed competitor emerges. Based on our current funding
arrangements, we anticipate that we will require $250,000 in additional funds to
continue  our  operations  for the next  twelve  months.  In the event  that our
financing  arrangement  with Golden Gate is terminated or if we need  additional
financing, there can be no assurance that financing will be available in amounts
or on terms  acceptable  to us, if at all. The  inability  to obtain  sufficient
funds from  operations or external  sources would require us to curtail or cease
operations.

If We are Unable to Obtain  Additional  Funding Our Business  Operations Will be
Harmed and if We do Obtain Additional  Financing Our then Existing  Shareholders
may Suffer Substantial Dilution
--------------------------------------------------------------------------------
         Additional   capital  may  be  required  to  effectively   support  the
operations and to otherwise  implement our overall business  strategy.  However,
there can be no assurance  that financing will be available when needed on terms
that are  acceptable  to us. The  inability  to obtain  additional  capital will
restrict  our  ability to grow and may reduce our ability to continue to conduct
business operations.  If we are unable to obtain additional  financing,  we will
likely be required to curtail our marketing and  development  plans and possibly
cease our operations.  Any additional  equity financing may involve  substantial
dilution to our then existing shareholders.

Our Independent  Registered  Public  Accounting  Firm Has Expressed  Substantial
Doubt About Our Ability to  Continue  as a Going  Concern,  Which May Hinder Our
Ability to Obtain Future Financing
--------------------------------------------------------------------------------
         In their report dated  September 21, 2004, our  Independent  Registered
Public  Accounting Firm stated that our financial  statements for the year ended
                                       6


June 30, 2004 were prepared  assuming that we would continue as a going concern.
Our  ability to continue  as a going  concern is an issue  raised as a result of
recurring losses from operations ($23,061,065), including net losses of $998,531
and $701,052  for the fiscal years ending June 30, 2004 and 2003,  respectively.
We continue to experience net losses. Our ability to continue as a going concern
is subject to our ability to generate a profit and/or obtain  necessary  funding
from outside sources,  including  obtaining  additional funding from the sale of
our  securities,  increasing  sales or  obtaining  loans and grants from various
financial   institutions   where   possible.   Our   continued  net  losses  and
stockholders'  deficit  increases the difficulty in meeting such goals and there
can be no assurances that such methods will prove successful.

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
--------------------------------------------------------------------------------
         The  general   market  for  our  products  and  services  is  extremely
competitive and includes  several  companies  which have achieved  substantially
greater market shares than we have, and have longer  operating  histories,  have
larger customer bases, have  substantially  greater  financial,  development and
marketing  resources  than we do. If  overall  demand  for our  products  should
decrease it could have a materially adverse affect on our operating results.

Any Inability to Adequately  Protect Our Proprietary  Technology  Could Harm Our
Ability to Compete
--------------------------------------------------------------------------------
         Our future  success  and  ability  to compete  depends in part upon our
proprietary technology, patents and trademarks, which we attempt to protect with
a combination of patent, copyright,  trademark and trade secret laws, as well as
with our  confidentiality  procedures and  contractual  provisions.  These legal
protections  afford only limited protection and are time-consuming and expensive
to obtain and/or  maintain.  Further,  despite our efforts,  we may be unable to
prevent third parties from infringing upon or misappropriating  our intellectual
property.

         We have been  issued  three  patents  by the United  States  Patent and
Trademark  Office.  Any  patents  that are  issued  to us could be  invalidated,
circumvented  or challenged.  If challenged,  our patents might not be upheld or
their claims could be narrowed. Our intellectual property may not be adequate to
provide us with  competitive  advantage or to prevent  competitors from entering
the markets for our products.  Additionally, our competitors could independently
develop  non-infringing  technologies that are competitive with,  equivalent to,
and/or   superior   to   our   technology.    Monitoring   infringement   and/or
misappropriation  of  intellectual  property can be  difficult,  and there is no
guarantee  that we would  detect any  infringement  or  misappropriation  of our
proprietary rights. Even if we do detect infringement or misappropriation of our
proprietary rights,  litigation to enforce these rights could cause us to divert
financial and other  resources away from our business  operations.  Further,  we
license our products internationally,  and the laws of some foreign countries do
not  protect  our  proprietary  rights to the same  extent as do the laws of the
United States.

Our Products may Infringe Upon the  Intellectual  Property  Rights of Others and
Resulting  Claims  Against  Us Could be  Costly  and  Require  Us to Enter  Into
Disadvantageous License or Royalty Arrangements
--------------------------------------------------------------------------------
         The  business  process  outsourcing  industry is  characterized  by the
existence  of a large  number  of  patents  and  frequent  litigation  based  on
allegations of patent  infringement  and the violation of intellectual  property
rights. Although we attempt to avoid infringing upon known proprietary rights of
third  parties,  we may be subject to legal  proceedings  and claims for alleged
infringement by us or our licensees of third-party  proprietary  rights, such as

                                       7


patents,  trade  secrets,  trademarks  or  copyrights,  from time to time in the
ordinary  course  of  business.  Any  claims  relating  to the  infringement  of
third-party  proprietary  rights,  even if not successful or meritorious,  could
result in costly litigation, divert resources and our attention or require us to
enter into royalty or license  agreements  which are not  advantageous to us. In
addition,  parties making these claims may be able to obtain injunctions,  which
could prevent us from selling our products. Furthermore, former employers of our
employees may assert that these employees have improperly disclosed confidential
or proprietary  information to us. Any of these results could harm our business.
We may be  increasingly  subject  to  infringement  claims as the number of, and
number of features of, our products grow.

If We are not Able to Manage  the  Growth of Our  Company  We may Never  Achieve
Profitability
--------------------------------------------------------------------------------
         Our  success  will  depend on our  ability  to expand  and  manage  our
operations  and  facilities.  There can be no assurance  that we will be able to
manage our growth, meet the staffing  requirements of manufacturing  scale-up or
for current or additional collaborative relationships or successfully assimilate
and train our new employees.  In addition, to manage our growth effectively,  we
will be required to expand our  management  base and enhance our  operating  and
financial  systems.  If we continue to grow,  there can be no assurance that the
management  skills and  systems  currently  in place will be adequate or that we
will be able to manage any additional growth effectively. Failure to achieve any
of these goals could have a material  adverse effect on our business,  financial
condition or results of operations.

If We Are Unable to Retain the Services of Messrs. Steele,  Brownell and Haag or
If We Are Unable to Successfully Recruit Qualified Personnel, We May Not Be Able
to Continue Our Operations.
--------------------------------------------------------------------------------
         Our success depends to a significant  extent upon the continued service
of Mr. Robert Steele,  our Chief Executive  Officer,  Mr. Robert  Brownell,  our
President,  and Mr.  Andrew  Haag,  our  Chief  Financial  Officer.  Loss of the
services  of Messrs.  Steele,  Brownell  or Haag  could have a material  adverse
effect on our growth,  revenues,  and prospective  business.  We do not maintain
key-man insurance on the life of Messrs. Steele,  Brownell or Haag. In addition,
in order to  successfully  implement  and manage our business  plan,  we will be
dependent upon, among other things, successfully recruiting qualified personnel.
Competition for qualified individuals is intense. There can be no assurance that
we will be able to find,  attract and retain existing  employees or that we will
be able to find, attract and retain qualified personnel on acceptable terms.


Risks Relating to Our Current Financing Arrangement:
----------------------------------------------------

There Are a Large  Number  of  Shares  Underlying  Our  Convertible  Debentures,
Convertible  Notes and 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 November  18,  2004,  we had  73,574,000  shares of common  stock
issued and outstanding, convertible debentures outstanding that may be converted
into an estimated  18,710,526  shares of common stock at current  market prices,
convertible  notes  outstanding,  plus  interest,  that  may be  converted  into
approximately  11,366,667  shares of common  stock and  outstanding  warrants to
purchase 22,066,667 shares of common stock. In addition, the number of shares of
common stock issuable upon conversion of the outstanding  convertible debentures
may  increase  if the market  price of our stock  declines.  All of the  shares,
including all of the shares issuable upon conversion of the debentures and notes
and upon exercise of our warrants, may be sold without restriction.  The sale of
these shares may adversely affect the market price of our common stock.

                                       8


The  Continuously   Adjustable  Conversion  Price  Feature  of  Our  Convertible
Debentures  Could Require Us to Issue a Substantially  Greater Number of Shares,
Which Will Cause Dilution to Our Existing Stockholders.
--------------------------------------------------------------------------------
         If we are unable to make repayment of the  convertible  debentures on a
monthly basis, our obligation to issue shares upon conversion of our convertible
debentures is essentially  limitless.  The following is an example of the amount
of  shares  of our  common  stock  that are  issuable,  upon  conversion  of our
convertible debentures (excluding accrued interest), based on market prices 25%,
50% and 75% below the market price, as of November 19, 2004 of $0.24.

                  
% Below                                             Number              
Outstanding    Price Per        With Discount      of Shares            % of
Market           Share             at 20%          Issuable             Stock
------           -----             ------          --------             -----

25%             $.18               $.144           19,916,667           21.30%
50%             $.12               $.096           31,375,000           29.90%
75%             $.06               $.048           65,750,000           47.19%

         As  illustrated,  the number of shares of common  stock  issuable  upon
conversion of our  convertible  debentures  will increase if the market price of
our stock declines, which will cause dilution to our existing stockholders.

The  Continuously   Adjustable  Conversion  Price  feature  of  our  Convertible
Debentures  May  Encourage  Investors  to Make Short Sales in Our Common  Stock,
Which Could Have a Depressive Effect on the Price of Our Common Stock.
--------------------------------------------------------------------------------
         The convertible  debentures are  convertible  into shares of our common
stock at a 20%  discount to the trading  price of the common  stock prior to the
conversion.  The significant  downward pressure on the price of the common stock
as Golden Gate  Investors  converts and sells  material  amounts of common stock
could  encourage  short sales by investors.  This could place  further  downward
pressure  on the price of the common  stock.  Golden Gate  Investors  could sell
common  stock  into the market in  anticipation  of  covering  the short sale by
converting its securities,  which could cause the further  downward  pressure on
the stock price. In addition, not only the sale of shares issued upon conversion
or exercise of debentures and warrants,  but also the mere perception that these
sales could occur, may adversely affect the market price of the common stock.

The  Issuance  of Shares  Upon  Conversion  of the  Convertible  Debentures  and
Convertible  Notes and Exercise of Outstanding  Warrants May Cause Immediate and
Substantial Dilution to Our Existing Stockholders.
--------------------------------------------------------------------------------
         The issuance of shares upon  conversion of the  convertible  debentures
and  convertible  notes and  exercise  of  warrants  may  result in  substantial
dilution to the interests of other stockholders  since the selling  stockholders
may ultimately convert and sell the full amount issuable on conversion. Although
Golden  Gate  Investors  may not convert  their  convertible  debentures  and/or
exercise their  warrants if such  conversion or exercise would cause them to own
more  than 4.9% of our  outstanding  common  stock,  this  restriction  does not
prevent Golden Gate Investors from  converting  and/or  exercising some of their
holdings and then  converting the rest of their  holdings.  In this way,  Golden
Gate  Investors  could sell more than this limit while never  holding  more than
this  limit.  There is no upper limit on the number of shares that may be issued
which will have the effect of further diluting the proportionate equity interest
and voting  power of holders of our common  stock,  including  investors in this
offering.

                                       9


In The Event That Our Stock Price Declines, The Shares Of Common Stock Allocated
For Conversion Of The  Convertible  Debentures  and Registered  Pursuant To This
Prospectus  May Not Be  Adequate  And 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.
--------------------------------------------------------------------------------
         Based on our current  market  price and the  potential  decrease in our
market  price as a result of the  issuance  of  shares  upon  conversion  of the
convertible  debentures,  we have made a good faith estimate as to the amount of
shares of common  stock  that we are  required  to  register  and  allocate  for
conversion  of the  convertible  debentures.  Accordingly,  we  are  registering
20,625,000 shares to cover the conversion of the convertible debentures.  In the
event  that our stock  price  decreases,  the  shares  of  common  stock we have
allocated  for  conversion of the  convertible  debentures  and are  registering
hereunder  may  not  be  adequate.  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 substantial costs in connection
with the preparation and filing of such registration statement.

If We  Are  Required  for  any  Reason  to  Repay  Our  Outstanding  Convertible
Debentures,  We Would Be Required to Deplete Our Working Capital,  If Available,
Or Raise Additional Funds. Our Failure to Repay the Convertible  Debentures,  If
Required,  Could Result in Legal Action Against Us, Which Could Require the Sale
of Substantial Assets.
--------------------------------------------------------------------------------
         In August 2004, we entered into a Securities Purchase Agreement for the
sale of an aggregate of $300,000 principal amount of convertible debentures. The
convertible debentures are due and payable, with 5 3/4% interest, two years from
the date of issuance,  unless sooner  converted into shares of our common stock.
In  addition,  any event of default  could  require the early  repayment  of the
convertible  debentures  at a price  equal to 125% of the  amount  due under the
debentures.  We anticipate that the full amount of the  convertible  debentures,
together  with accrued  interest,  will be  converted  into shares of our common
stock,  in accordance with the terms of the  convertible  debentures.  If we are
required to repay the  convertible  debentures,  we would be required to use our
limited working capital and raise  additional  funds. If we were unable to repay
the debentures when required,  the debenture holders could commence legal action
against us and  foreclose  on all of our assets to recover the amounts  due. Any
such action would require us to curtail or cease operations.

Risks Relating to Our Common Stock:
-----------------------------------

If We Fail to Remain Current on Our Reporting Requirements,  We Could be Removed
From the OTC Bulletin Board Which Would Limit the Ability of  Broker-Dealers  to
Sell Our Securities and the Ability of Stockholders to Sell Their  Securities in
the Secondary Market.
--------------------------------------------------------------------------------
         Companies  trading  on the OTC  Bulletin  Board,  such  as us,  must be
reporting  issuers under Section 12 of the  Securities  Exchange Act of 1934, as
amended,  and must be current in their  reports  under  Section  13, in order to
maintain price  quotation  privileges on the OTC Bulletin  Board.  If we fail to
remain current on our reporting  requirements,  we could be removed from the OTC
Bulletin Board. As a result,  the market  liquidity for our securities  could be
severely  adversely  affected by limiting the ability of  broker-dealers to sell
our securities and the ability of stockholders  to sell their  securities in the
secondary market.

                                       10


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 15g-9 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,  the
rules require:

         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 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 Commission 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.

                                       11

                                 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  stockholder.  We will not
receive any proceeds  from the sale of shares of common stock in this  offering.
However,  we will receive up to  $5,050,666.70  upon exercise of the warrants by
the  selling  stockholders.  We expect  to use the  proceeds  received  from the
exercise of the  warrants,  if any, for general  working  capital  purposes.  We
received  an  aggregate  of  $300,000  in  connection  with the  issuance of the
convertible  debenture  and  $700,000  in  connection  with the  issuance of the
convertible  notes to the selling  stockholders.  We used the $1,000,000 for the
general working capital purposes and the payment of professional fees.

            MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

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


                                    Low        High
                                    ---        ----
2003
----
First Quarter                        .03       .14
Second Quarter                       .02       .13
Third Quarter                        .03       .07
Fourth Quarter                       .03       .19

2004
----
First Quarter                        .09       .17
Second Quarter                       .10       .19
Third Quarter                        .13       .26
Fourth Quarter                       .12       .20

2005
----
First Quarter                        .12       .21
Second Quarter (1)                   .16       .26

(1) As of November 19, 2004

HOLDERS

         As of November 18, 2004, we had approximately 493 holders of our common
stock.  The number of record  holders  was  determined  from the  records of our
transfer  agent and does not  include  beneficial  owners of common  stock whose
shares  are  held  in the  names  of  various  security  brokers,  dealers,  and
registered  clearing  agencies.  The  transfer  agent  of our  common  stock  is
Interwest Transfer Company.

         We have never  declared or paid any cash dividends on our common stock.
We  do  not  anticipate  paying  any  cash  dividends  to  stockholders  in  the
foreseeable future. In addition,  any future determination to pay cash dividends
will be at the  discretion of the Board of Directors and will be dependent  upon
our financial condition, results of operations,  capital requirements,  and such
other factors as the Board of Directors deem relevant.

                                       12

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

         Some of the  information  in this  Form SB-2  contains  forward-looking
statements that involve  substantial risks and  uncertainties.  You can identify
these  statements  by  forward-looking  words such as "may,"  "will,"  "expect,"
"anticipate," "believe," "estimate" and "continue," or similar words. You should
read statements that contain these words carefully because they:

         o    discuss our future expectations;
         o    contain  projections of our future results of operations or of our
              financial condition; and
         o    state other "forward-looking" information.

         We believe it is important to communicate  our  expectations.  However,
there may be events in the future that we are not able to accurately  predict or
over  which we have no  control.  Our actual  results  and the timing of certain
events could differ materially from those  anticipated in these  forward-looking
statements as a result of certain factors, including those set forth under "Risk
Factors," "Business" and elsewhere in this prospectus. See "Risk Factors."

Overview 
-------- 

         We have been a  manufacturer  of hardware  and  software  and a service
provider  to the  corporate  and  public  sector  markets  since  1991.  Our new
division,  Quintek Services, Inc. delivers business process outsourcing services
and information  lifecycle management solutions to document intensive industries
such as healthcare and financial  services.  Business process outsourcing is the
delegation,  by the customer,  of the operational  responsibility for a business
process's  execution and  performance  within the  customer's  environment.  The
solutions  and  services we provide  enable  organizations  to secure and manage
their information and document business processes more efficiently.

         Quintek  Services  provides  business process  outsourcing  services to
Fortune  500,  Russell  2000  companies  and public  sector  organizations.  Our
business process  outsourcing  services range from the digitizing,  indexing and
uploading of source  documents  through  simple  customer-specific,  rules-based
decision making.

         We sell  hardware,  software and  services  for  printing  large format
drawings  such as  blueprints  and computer  aided design files  directly to the
microfilm  format of aperture cards. We are the only  manufacturer of a patented
chemical-free desktop microfilm printer for aperture cards.

Critical Accounting Policies and Estimates

Revenue Recognition

         Revenue  is  recognized  when  earned.  We  recognize  our  revenue  in
accordance  with the  Securities  and  Exchange  Commission's  Staff  Accounting
Bulletin No. 104, "Revenue Recognition in Financial Statements" and The American
Institute of Certified Public Accountants  Statement of Position 97-2, "Software
Revenue  Recognition,"  as amended as amended by Statement of Position  98-4 and
Statement of Position 98-9.

Use of estimates

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

                                       13

Cash and cash equivalents

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

Accounts Receivable

            We  maintain  reserves  for  potential  credit  losses  on  accounts
receivable.  We review  the  composition  of  accounts  receivable  and  analyze
historical  bad debts,  customer  concentrations,  customer  credit  worthiness,
current economic trends and changes in customer payment patterns to evaluate the
adequacy  of these  reserves.  Reserves  are  recorded  primarily  on a specific
identification basis.

Inventories

         We value  inventories  at the lower of cost  (determined  on  first-in,
first-out) or market.  We compare the cost of inventories  with the market value
and allowance is made for writing down the inventories to their market value, if
lower.

Property & Equipment

            Property  and  equipment  are  stated  at  cost.   Expenditures  for
maintenance and repairs are charged to earnings as incurred; additions, renewals
and  betterments  are  capitalized.  When  property and equipment are retired or
otherwise disposed of, the related cost and accumulated depreciation are removed
from the  respective  accounts,  and any gain or loss is included in operations.
Depreciation of property and equipment is provided using the straight-line  over
the estimated useful lives (3-7 years) of the assets.

Intangible Assets

         Intangible   assets  consist  of  patents  and  purchased   proprietary
processes  and  are  being  amortized  using  straight-line  method  over  their
remaining useful lives of 4 years. We evaluate intangible assets for impairment,
at least on an annual  basis and  whenever  events or changes  in  circumstances
indicate  that the  carrying  value may not be  recoverable  from its  estimated
future cash flows.  Recoverability of intangible assets, other long-lived assets
and,  goodwill  is  measured  by  comparing  their net book value to the related
projected  undiscounted  cash flows from these  assets,  considering a number of
factors including past operating results, budgets, economic projections,  market
trends  and  product  development  cycles.  If the net book  value of the  asset
exceeds the related  undiscounted cash flows, the asset is considered  impaired,
and a second  test is  performed  to  measure  the  amount of  impairment  loss.
Potential  impairment  of  goodwill  after  July 1, 2002 is being  evaluated  in
accordance  with SFAS No. 142. The SFAS No. 142 is  applicable  to our financial
statements beginning July 1, 2002.

Long-lived assets

         Effective January 1, 2002, we adopted Statement of Financial Accounting
Standards  No. 144,  "Accounting  for the  Impairment  or Disposal of Long-Lived
Assets",  which addresses financial  accounting and reporting for the impairment
or disposal of long-lived  assets and supersedes  SFAS No. 121,  "Accounting for
the  Impairment of Long-Lived  Assets and for  Long-Lived  Assets to be Disposed
Of,"  and the  accounting  and  reporting  provisions  of APB  Opinion  No.  30,
"Reporting the Results of Operations for a Disposal of a Segment of a Business."
We periodically  evaluate the carrying value of long-lived assets to be held and
used in  accordance  with SFAS 144.  SFAS 144 requires  impairment  losses to be
recorded on long-lived  assets used in operations  when indicators of impairment
are present and the  undiscounted  cash flows estimated to be generated by those
assets are less than the assets'  carrying  amounts.  In that  event,  a loss is

                                       14


recognized  based on the amount by which the  carrying  amount  exceeds the fair
market value of the long-lived assets.  Loss on long-lived assets to be disposed
of is determined in a similar manner, except that fair market values are reduced
for the cost of disposal.

Software development costs

            We have adopted Statement of Position 98-1 "Accounting for the Costs
of Computer Software  Developed or Obtained for Internal Use", as its accounting
policy  for  internally  developed  computer  software  costs.  Under  SOP 98-1,
computer  software  costs  incurred  in the  preliminary  development  stage are
expensed as incurred.  Computer  software costs incurred  during the application
development  stage are capitalized  and amortized over the software's  estimated
useful life.

            We  make  on-going   evaluations  of  the   recoverability   of  its
capitalized software by comparing the amount capitalized for each product to the
estimated net realizable value of the product. If such evaluations indicate that
the unamortized  software  development costs exceed the net realizable value, we
write off the amount that the unamortized  software development costs exceed net
realizable value.

Stock-based compensation

            SFAS No. 123 prescribes  accounting and reporting  standards for all
stock-based  compensation  plans,  including employee stock options,  restricted
stock, employee stock purchase plans and stock appreciation rights. SFAS No. 123
requires compensation expense to be recorded (i) using the new fair value method
or (ii) using the existing accounting rules prescribed by Accounting  Principles
Board Opinion No. 25,  "Accounting  for stock issued to employees"  (APB 25) and
related  interpretations  with  pro  forma  disclosure  of what net  income  and
earnings per share would have been had we adopted the new fair value method.  We
have chosen to account for stock-based  compensation using Accounting Principles
Board  Opinion  No. 25,  "Accounting  for Stock  Issued to  Employees"  and have
adopted the disclosure  only provisions of SFAS 123.  Accordingly,  compensation
cost for stock  options is measured as the excess,  if any, of the quoted market
price of our  stock at the date of the grant  over the  amount  an  employee  is
required to pay for the stock.

Issuance of shares for service

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

Recent Accounting Pronouncements

            In December 2002, the FASB issued SFAS No. 148 "Accounting for Stock
Based Compensation-Transition and Disclosure". SFAS No. 148 amends SFAS No. 123,
"Accounting for Stock Based  Compensation",  to provide  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 Statement 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.  The  Statement is effective  for our interim  reporting  period ending
January 31, 2003.

            In  compliance  with FAS No.  148,  we have  elected to  continue to
follow the intrinsic  value method in accounting  for our  stock-based  employee
compensation  plan as  defined  by APB  No.  25 and  have  made  the  applicable
disclosures.
                                       15


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

         In December  2003,  the  Financial  Accounting  Standards  Board (FASB)
issued a revised  Interpretation  No. 46,  "Consolidation  of Variable  Interest
Entities" (FIN 46R). FIN 46R addresses  consolidation by business enterprises of
variable  interest   entities  and   significantly   changes  the  consolidation
application of consolidation  policies to variable  interest  entities and, thus
improves  comparability  between  enterprises engaged in similar activities when
those activities are conducted  through variable  interest  entities.  We do not
hold any variable interest entities.

Results of  Operations  for the Year Ended June 30, 2004 As Compared to the Year
Ended June 30, 2003
--------------------------------------------------------------------------------

         Our revenues  totaled $298,653 and $388,888 for the twelve months ended
June 30, 2004 and 2003,  respectively,  a decrease of $90,235  (23%) in 2004 due
primarily to changing our sales focus to the services business.

         For the twelve months ended June 30, 2004 and 2003, cost of revenue was
$184,964 and $261,050  respectively,  a decrease of $76,086  (29%).  Our cost of
revenue for both periods consisted mostly of labor and production costs. Cost of
revenue  decreased in 2004 due to  decreased  revenues  from  changing our sales
focus to the services business.

         Operating expenses totaled $1,083,246 for the twelve-month period ended
June 30, 2004 as compared to $822,273  for the prior  twelve-month  period.  The
$260,973 (24%) increase in operating  expenses is due primarily to investment in
the new services business.

         We incurred no acquisition expenses in the twelve months ended June 30,
2004 and 2003, respectively.

         During the 12 month period  ending June 30, 2004,  we sold one contract
for document services, 19 customer service contracts, nine network upgrades, one
unit of QuinPlot  software,  and 154,000  aperture  cards. We expect to continue
generating sales revenue from these products in the future.

                                       16


         For the  twelve  months  ended  June 30,  2004 and 2003,  total  assets
equaled  $147,275  and  $214,006  respectively,  a  decrease  of  $66,731  (31%)
primarily  due to a  decrease  in  accounts  receivable,  intangible  assets and
investments.

         For the twelve  months  ended  June 30,  2004 and 2003,  total  current
liabilities  equaled  $2,177,580 and  $1,458,364,  an increase of $719,216 (49%)
primarily  due to  financing  to grow the  business.  We  executed  a  financing
agreement for a total of $500,000 in  convertible  notes to Kazi  Management VI,
LLC.

         For the twelve  months ended June 30, 2004 and 2003,  accounts  payable
and accrued  expenses  equaled  $438,826 and  $316,924  (the sum of $116,609 and
$200,315),  respectively, an increase of $121,902 (38%) primarily due to accrued
legal expenses,  leases purchases and office  relocation costs to facilitate new
revenue streams.

         For the twelve months ended June 30, 2004 and 2003,  loans payable from
stockholders equaled $244,056 and $32,300 respectively,  an increase of $211,756
(650%)  primarily  due to  stockholders  loaning  free  trading  shares to us to
facilitate financing to move the business forward.

         For the twelve months ended June 30, 2004 and 2003,  factoring  payable
equaled $43,230 and $146,890,  respectively, a decrease of $103,660 (70%) due to
us making these payments.

Results of Operations  for the Quarter  Ended  September 30, 2004 As Compared to
the Quarter Ended September 30, 2004
--------------------------------------------------------------------------------
         
         Our revenues  totaled  $114,266 and $108,177 for the three months ended
September 30, 2004 and 2003,  respectively,  an increase of $6,089 (6%) in 2004,
primarily due to changing our sales focus to the services business.  Revenues in
the previous  period resulted  primarily from sales of equipment,  aperture card
media, and maintenance  services.  Revenues in this period included $60,885 from
the new services business.

         For the three months ended  September 30, 2004 and 2003,  cost of sales
was $84,481 and $52,910, respectively, an increase of $31,571 (60%) in 2004. The
cost of  sales  for  the  previous  period  consisted  primarily  of  labor  and
production  costs.  The cost of sales for this  period  consisted  primarily  of
labor, facility and equipment lease costs.

         Operating  expenses totaled $1,202,109 for the three month period ended
September  30, 2004 as compared to  $165,898  for the three month  period  ended
September  30, 2003, a $1,036,211  (625%)  increase in 2004,  primarily due to a
increase in sales related  expenses and stock-based  compensation for consulting
services accrued over the past 18 months.

         During the three months  ended  September  30,  2004,  we billed on one
contract for document services,  19 maintenance  contracts,  one network upgrade
and 18,000 aperture cards.

         We are  currently  in  default  on  two  outstanding  promissory  notes
totaling $62,495.  Interest continues to accrue against the principal. The notes
are unsecured.  The holders of the notes that are in default have indicated that
they do not want to  convert  their debt to stock and wish to be repaid in cash.
At  present we do not have the funds to repay the  indebtedness.  We do not know
whether we will be able to repay or  renegotiate  this debt. If we are unable to
cure the default or  renegotiate  our debt,  we may not be able to continue as a
going concern.

         We owe $97,000 in payroll withholding taxes that are past due.

                                       17


Liquidity & Capital Resources
-----------------------------

         The  reports  of  our  independent   auditors  on  the  2004  and  2003
consolidated  financial statements included explanatory  paragraphs stating that
there is  substantial  doubt with  respect to our ability to continue as a going
concern. We believe that we have a plan to address these issues and enable us to
continue through the end of 2005. This plan includes obtaining additional equity
or debt financing and increasing sales of our outsourcing services.  Although we
believe that the plan will be realized,  there is no assurance that these events
will occur. In the event that we are  unsuccessful,  it is possible that we will
cease  operations or seek  bankruptcy  protection.  The  consolidated  financial
statements do not include any adjustments to reflect the  uncertainties  related
to  the   recoverability  and  classification  of  assets  or  the  amounts  and
classification  of liabilities  that may result from an inability on our part to
continue as a going concern.

         We have historically financed operations from the issuance of debt, the
sale of common stock and the conversion of common stock  warrants.  On September
30, 2004,  we had cash on hand of $11,670 and working  capital of  $(854,163) as
compared  to cash on hand of $15,600  and  working  capital of  ($2,127,979)  at
period-ending June 30, 2003.

         Net cash used in operating  activities of $(571,727) and $552 for three
months ended September 30, 2004 and 2003, respectively,  is attributed primarily
to an increase in  stock-based  compensation,  issuance of stock for  consulting
services and accounts payable and accrued expenses.

         Net cash used for investing activities of $0 for the three months ended
September 30, 2004 and ($9,092) for the three months ended September 30, 2003 is
primarily related to no purchases of other assets made during the period.

         Net cash  provided by  financing  activities  of $567,797 for the three
months ended  September 30, 2004 is based  primarily on sale of securities.  Net
cash  provided by  financing  activities  of $(8,066) for the three months ended
September 30, 2003 is based primarily on proceeds from factoring offset by notes
payable to stockholders.

         During the last 12 months, we have undertaken the following initiatives
to obtain funding for our ongoing operations:

         1)   On September  26, 2003 we entered into a Note  Purchase  Agreement
              with  an  individual   investor.   This  investor  purchased  five
              convertible  notes, each for $100,000,  for a total purchase price
              of $500,000. The convertible notes bear interest at 10% per annum.
              These notes are  convertible  into shares of our common stock at a
              price of $0.06. In connection  with this Note Purchase  Agreement,
              the investor will receive up to 9,166,667 warrants  exercisable at
              $0.10 per share and  expiring  on  September  26,  2008,  with the
              investor receiving one warrant for every share converted under the
              convertible  notes.  This prospectus  relates to the resale of the
              common stock underlying these convertible notes and warrants.

         2)   On July 11, 2004 we entered into a Securities  Purchase  Agreement
              with an individual investor. This investor purchased a convertible
              note for $20,000.  On August 31, 2004,  the holder  converted this
              note into 200,000 shares of our common stock.  In connection  with
              this Securities Purchase Agreement, we issued the investor 200,000
              warrants, exercisable at $0.15 per share, which expire on July 11,
              2007.  This  prospectus  relates to the resale of the common stock
              issued upon conversion of the  convertible  note and the shares of
              common stock underlying the warrants.

                                       18


         3)   On July 27, 2004 we entered into a Securities  Purchase  Agreement
              with an individual investor. This investor purchased a convertible
              note for $50,000.  On August 31, 2004,  the holder  converted this
              note into 500,000 shares of our common stock.  In connection  with
              this Securities Purchase Agreement, we issued the investor 500,000
              warrants, exercisable at $0.15 per share, which expire on July 27,
              2007.  This  prospectus  relates to the resale of the common stock
              issued upon conversion of the  convertible  note and the shares of
              common stock underlying the warrants.

         4)   On July 29, 2004,  we entered into an Agreement  with Langley Park
              Investments PLC, a London  investment  company to issue 14,000,000
              shares of our common stock to Langley Park  Investments  in return
              for  1,145,595  shares of Langley.  Fifty  percent of Langley Park
              Investments  shares  issued to us under this  agreement  are to be
              held in escrow  for two  years.  At the end of two  years,  if the
              market  price for our common  stock at or greater than the initial
              closing price, the escrow agent will release the remaining Langley
              Park Investments  shares to us. In the event that the market price
              for our common  stock is less than the initial  closing  price the
              amount released will be adjusted.

              Langley Park Investments' initial offering price was 1(pound) (One
              Pound UK per  share).  Our shares  are to be held by Langley  Park
              Investments  for a period  of at least  two  years.  Langley  Park
              Investments'  shares issued to us are free  trading.  Langley Park
              Investment  Trust Plc was  admitted to the Full List of The London
              Stock  Exchange  on  September  30,  2004 and  dealings in Langley
              shares commenced on October 7, 2004.

         5)   On August 2, 2004, we signed a Master Lease Agreement with Vencore
              Solutions,  LLC, a venture leasing company located in Lake Oswego,
              Oregon. Under the agreement, we established a lease line of credit
              for up to  $240,000  in  equipment  financing.  This is a  capital
              lease,  whereby we pay a monthly rental rate equal to 3.45% of the
              total   hardware   purchases  and  6.35%  of  the  total  software
              purchases.  The lease term for hardware purchases is 36 months and
              18 months for  software.  The  effective  annual  interest rate is
              roughly 8%. Purchases made will be recognized both as an asset and
              as a liability (for the lease  payments) on the balance sheet.  At
              the end of the lease, we have the option to purchase the equipment
              or return it.  Vencore  Solutions  received  144,000  warrants  to
              purchase our common stock at $0.10, expiring on August 2, 2007.

         6)   We entered into a Securities Purchase Agreement with an accredited
              investor  in  August  2004  for  the  sale  of  (i)   $300,000  in
              convertible  debentures and (ii) warrants to buy 3,000,000  shares
              of our common stock.

              This  prospectus  relates  to  the  resale  of  the  common  stock
              underlying these convertible debentures and warrants.

              The investors are  obligated  to  provide us  with an aggregate of
              $300,000 as follows:

              o    $175,000 was disbursed to us on August 4, 2004;
              o    $50,000  has  been  retained  for  services  provided  to our
                   company by various  professionals,  which shall be  disbursed
                   upon effectiveness of this registration statement; and
              o    $75,000  will  be  released   upon   effectiveness   of  this
                   registration statement.

                                       19


              The debentures bear interest at 5 3/4%,  mature two years from the
              date of issuance,  and are  convertible  into our common stock, at
              the selling stockholder's  option. The convertible  debentures are
              convertible into the number of our shares of common stock equal to
              the principal amount of the debentures being converted  multiplied
              by 11, less the product of the conversion  price multiplied by ten
              times the dollar amount of the debenture. The conversion price for
              the  convertible  debenture  is the  lesser  of (i)  $0.50 or (ii)
              eighty  percent of the of the  average of the five  lowest  volume
              weighted  average prices during the twenty (20) trading days prior
              to the conversion.  If the volume weighted  average price is below
              $0.10 on a  conversion  date,  we have the  right to  pre-pay  the
              amount of the debenture the holder elects to convert, plus accrued
              and unpaid interest, at 125% of such amount;  however, if we elect
              to pre-pay in this situation,  the debenture  holder has the right
              to withdraw the notice of conversion. Also, if the volume weighted
              average  price is below  $0.10 at any  point  during a month,  the
              holder is not  obligated  to convert any portion of the  debenture
              during that month.  Accordingly,  there is in fact no limit on the
              number of shares into which the  debenture  may be  converted.  In
              addition,  the selling  stockholder  is  obligated to exercise the
              warrant concurrently with the submission of a conversion notice by
              the selling stockholder. The warrant is exercisable into 3,000,000
              shares of common stock at an exercise price of $1.00 per share.

              Golden Gate Investors has  contractually  committed to convert not
              less than 5% of the original face value of the  debenture  monthly
              beginning the month after the effective  date of the  Registration
              Statement.  Golden Gate Investors is required to exercise warrants
              concurrently  with the exercise of a  conversion  notice under the
              debenture and is committed to exercise at least 5% of the warrants
              per month after the effective date of the Registration  Statement.
              In the event that  Golden  Gate  Investors  breaches  the  minimum
              restriction on the debenture and warrant,  Golden Gate will not be
              entitled to collect  interest on the debenture for that month.  If
              Golden Gate  submits a conversion  notice and the volume  weighted
              average  price  is  less  then  $.10  per  share,  then we will be
              entitled  to prepay  the  portion of the  debenture  that is being
              converted  at 125% of such  amount.  If we elect to  prepay,  then
              Golden Gate may withdraw its conversion notice.

              Golden  Gate has  further  contractually  agreed to  restrict  its
              ability to convert the  debenture or exercise  their  warrants and
              receive  shares of our common stock such that the number of shares
              held by the Holder and its  affiliates  after such  conversion  or
              exercise  does not exceed 4.9% of the then issued and  outstanding
              shares of our common stock.

              In the  event  that the  registration  statement  is not  declared
              effective  by the  required  deadline,  which is 150 days from the
              date of the Securities Purchase Agreement,  Golden Gate may demand
              repayment of the Debenture of 150% of the face amount outstanding,
              plus all accrued and unpaid interest, in cash. If the repayment is
              accelerated,  we are also obligated to issue to Golden Gate 50,000
              shares of common  stock and  $15,000 for each  30-day  period,  or
              portion thereof, during which the face amount,  including interest
              thereon,  remains  unpaid.  If  Golden  Gate  does  not  elect  to
              accelerate the debenture,  we are required to immediately issue to
              Golden  Gate  50,000  shares of common  stock and $15,000 for each
              30-day period,  or portion thereof,  during which the face amount,
              including interest thereon, remains unpaid.

                                       20


         7)   We entered into a Securities Purchase Agreement with an accredited
              investor   on  August  17,  2004  for  the  sale  of  $200,000  in
              convertible notes.

              The  investor  is  obligated  to provide us with an  aggregate  of
              $200,000 as follows:

              o    $100,000 was disbursed on August 17, 2004; and
              o    $100,000   will  be   disbursed   within  five  days  of  the
                   effectiveness of this prospectus.

              Accordingly,  we have received a total of $100,000 pursuant to the
              Securities Purchase Agreement.

              The convertible  notes bear interest at 10%, mature two years from
              the date of issuance,  and are convertible  into our common stock,
              at the selling  stockholders'  option,  at $0.10 per share. In the
              event that we enter into an agreement  subsequent  to execution of
              the  Securities  Purchase  Agreement  to sell  common  stock  or a
              convertible  instrument  that  converts into Common Stock prior to
              conversion  of these  debentures at a price less than a conversion
              price of $0.10, then the conversion price of these debentures will
              reset to the lower of $0.10 or the lower conversion price equal to
              that in the  subsequent  agreement.  Warrants are  exercisable  at
              $0.12 into shares of our common  stock of and expire on August 17,
              2007.  This  prospectus  relates to the resale of the common stock
              underlying these convertible notes and warrants.

         8)   On September 15, 2004 we entered into a Stock  Purchase  Agreement
              with an individual  investor.  This investor  purchased  1,000,000
              shares  of our  common  stock,  at $0.10  per  share,  for a total
              purchase price of $100,000. In connection with this Stock Purchase
              Agreement, we issued the investor 1,000,000 warrants,  exercisable
              at $0.13 per share,  which  expire on  September  15,  2007.  This
              prospectus  relates to the resale of the common  stock  underlying
              these convertible notes and warrants.

         We believe that the receipt of net proceeds from the sale of the common
stock and the exercise of common stock warrants plus cash  generated  internally
from sales will be sufficient to satisfy our future operations,  working capital
and other cash requirements for the remainder of the fiscal year. However, if we
are unable to raise  sufficient  capital,  we may need to sell  certain  assets,
enter into new strategic partnerships, reorganize, or merge with another company
to effectively maintain operations.

                                    BUSINESS

BACKGROUND

         Quintek  Electronics,  Inc., our predecessor  company,  founded in July
1991, acquired technology, related assets and patent rights to its aperture card
business during 1991 and 1992. On January 14, 1999,  Quintek  Electronics,  Inc.
was acquired in a merger by Pacific  Diagnostics  Technologies,  Inc. as part of
their Chapter 11 Plan of  Reorganization,  and the  surviving  entity's name was
changed to Quintek  Technologies,  Inc.  Since the merger,  Quintek Technologies
continued  to sell its  aperture  card  products  and all former  operations  of
Pacific Diagnostics Technologies,  Inc. were discontinued. On February 24, 2000,
we  acquired  all  of the  out  standing  shares  of  common  stock  of  Juniper
Acquisition  Corporation.  Upon  effectiveness  of  that  acquisition,   Quintek
Technologies  elected to become the  successor  issuer to Juniper for  reporting
purposes under the Securities Exchange Act of 1934.

                                       21


BUSINESS OVERVIEW

         We have been a  manufacturer  of hardware  and  software  and a service
provider  to the  corporate  and  public  sector  markets  since  1991.  Our new
division,  Quintek Services, Inc. delivers business process outsourcing services
and information  lifecycle management solutions to document intensive industries
such as healthcare and financial  services.  Business process outsourcing is the
delegation,  by the customer,  of the operational  responsibility for a business
process's  execution and  performance  within the  customer's  environment.  The
solutions  and  services we provide  enable  organizations  to secure and manage
their information and document business processes more efficiently.

         Quintek  Services  provides  business process  outsourcing  services to
Fortune  500,  Russell  2000  companies  and public  sector  organizations.  Our
business process  outsourcing  services range from the digitizing,  indexing and
uploading of source  documents  through  simple  customer-specific,  rules-based
decision making.

         We sell  hardware,  software and  services  for  printing  large format
drawings  such as  blueprints  and computer  aided design files  directly to the
microfilm  format of aperture cards. We are the only  manufacturer of a patented
chemical-free desktop microfilm printer for aperture cards.

RECENT BUSINESS DEVELOPMENTS

         On February 17, 2004,  we announced  our  cradle-to-grave  strategy for
providing customer solutions at each stage of the information lifecycle from the
creation of documents through archival.  On March 16, 2004, we announced that as
our first step in executing  this plan, we hired Bob Brownell as President.  Mr.
Brownell has more than  twenty-five  years  experience in selling and delivering
document management  solutions.  On March 30, 2004, we announced hiring Chris de
Lapp as Senior Sales Executive. On April 21, 2004, we announced that we would be
entering the rapidly expanding  business process  outsourcing market through our
new Quintek Services division. In June 2004, we announced that FedEx Kinko's has
selected us as their scanning  partner of choice for their Western  Region.  Our
growth plan is focused on our new Quintek Services division.

OUR PRODUCTS AND SERVICES

DOCUMENT MANAGEMENT AND IMAGING MARKET

         According  to a March  2004  report by  research  firm IDC,  the global
document  management and imaging  outsourcing market reached $13 billion in 2003
and is  expected  to expand at a compound  annual  growth rate of 19.7% over the
next three years.

         The rapid  growth of the  document  management  market has been largely
unnoticed by industry  watchers  because it is manifested very  differently from
industry to industry, IDC noted. While some industries are simply shifting their
efforts from paper to electronic media in order to save money,  others,  such as
the  health  care  industry  as part of its  Health  Insurance  Portability  and
Accountability  Act  requirements,  are  attempting  to implement  cross-company
document management standards and technologies.

         Because most business process outsourcing  processes start by capturing
data and  organizing  it into  digital  formats,  the need for service  provider
support has exploded.  Companies wanting to bring unstructured data on line have
been faced with the task of converting this  information  into electronic  form.
Unstructured  data is considered any media in paper,  film, fiche or other forms
that are not readily available to the knowledge worker.

                                       22


         Companies  electing to image capture their paper  documents are turning
to service  providers as a source of digitizing  this  information.  Outsourcing
this  business  to service  providers  has proven  less  expensive  than  hiring
permanent staff.  Temporary  employees have proven ineffective since conversions
are not  generally  done all at once.  Companies  attempting to purchase all the
necessary  equipment to do their work in-house  cannot keep up with the changing
technologies.

Vertical Markets

         We  are  targeting  three  vertical   markets,   mortgage   processing,
healthcare claims processing and accounts payable processing.

Home Mortgage Processing

         In 2002 mortgage  originators funded $2.787 trillion in loans, in 2003,
they funded  $3.810  trillion in loans and  according to the  Mortgage  Banker's
Association,  they  forecast  that  $2.597  trillion  will be funded in 2004 and
$1.823  trillion in 2005.  Sales of new  mortgages  and  refinancings  have been
driven by historically low interest rates.

         Mortgage transactions are paper intensive.  Portfolios of mortgages are
traded.  Almost every financial  services company that generates  consumer loans
(mortgages,  auto,  and  credit  cards)  needs to be able to share and  exchange
documents  electronically  with outside  entities when they are selling the loan
asset to another  organization.  Portfolios  of mortgages are rated A through C.
This rating in  significantly  influenced by the quality of the title documents,
HUD forms,  escrow  documents and other closing  documents  associated  with the
initial  transaction  between  the home  buyer and the  original  lender.  These
documents  need to pass  efficiently  between  hundreds  of people in and out of
these financial institutions.

         Home mortgage  company's  primary  business is the  origination  of new
loans and refinancings.  They are not in the information  technology or document
management  business.  They make money by charging  transaction related fees and
completing these  transactions  quickly and efficiently with the lowest possible
sales  and  marketing  costs.   Mortgages  companies  outsource  their  document
processing for two primary reasons.  First,  both sides of the transaction would
like to eliminate the costs associated with copying and shipping paper documents
and second, it reduce the risks associated with exposure to market fluctuations.
There is a critical  need to  minimize  the amount of time it takes to  complete
loan sale  transfer  activities.  Additionally,  they  outsource  this  document
processing  to  experts in  document  imaging  so that the  portfolios  have the
highest possible value as based on the legibility of the documentation.

Healthcare Claims Processing

         A new IDC study  released on May 25,  2004 shows that U.S.  spending on
claims process outsourcing services totaled $10.1 billion in 2003, a 6.8% growth
over 2002. IDC projects that the market (comprised of the commercial healthcare,
government healthcare,  and insurance industries) will increase to $15.7 billion
in 2008, with a five-year compound annual growth rate of 9.1%.

         The two major issues in the heavily regulated health claim industry are
service and costs. The health  insurance  industry is required by law to service
their customers. Claims must be paid or denied within regulated timeframes. When
claims are not  processed  within those time  limits,  expensive  penalties  are
invoked.  Service  timelines are  adversely  impacted  when  additional  medical
records are required.  Claim files are pending until requested documents arrive;
and documents must be manually matched to the existing file.  Complex claims are
more  likely to be  misplaced  because  they must be  routed to  medical  review

                                       23


specialists,  and quality control.  As files are sent from one department to the
next,  it is more  difficult  to meet  service  standards,  and  keep  track  of
processing  timeframes.  Paper files  compound  service  inefficiencies  because
documents and files are lost or delayed in routing. Claims service is expensive.
When information  isn't available to insureds and providers,  it causes repeated
phone  calls,   re-submission  of  claims,  and  additional  work.  The  service
inefficiencies  inherent to paper files generate costs and expensive  regulatory
penalties.

Accounts Payable Processing

         Most large  companies can save money be contracting  with a business to
outsource  back-office  functions such as processing their accounts payable.  In
processing and paying invoices,  the focus is on quickly  approving  payments by
extracting data from scanned documents and loading into global,  enterprise-wide
databases to support decision making such as paying or declining an invoice.

         Customers  often  install and  maintain  their own  payment  processing
workflow  software to review,  pay or decline  invoices.  In order to review and
process  invoices with such  software,  the data on the paper invoices has to be
scanned, captured and loaded into the client's database or web-based application
service provider.

Offshore Partnerships

         To  provide   customers  with  compelling   pricing  and  quality,   we
electronically deliver work offshore to India where it is processed and returned
to the United States  electronically.  India is rapidly becoming a leading world
supplier of business process outsourcing and data conversion services.  With the
India business process  outsourcing market growing at a compounded annual growth
rate of more than 25%, many companies  based in the United States are leveraging
the compelling advantages of cost, quality and cycle time found in India.

Services

High Speed Scanning at Client Site or Our Production Center

         Fortune 500 companies and other large  organizations  manage  documents
using  enterprise  content  management  systems  such as OnBase,  Documentum  or
FileNet. These are very large multi-user databases with a web browser interfaces
that allow people all over the world to access and interact with  document-based
content in an organized  manner  twenty-four  hours a day and seven days a week.
For example, a large financial services company might have an enterprise content
management  system that can support a worldwide  staff of 12,000  employees  who
need to access 30 million pages of data in Adobe PDF format.

         The  scope of work for a high  speed  scanning  contract  will  usually
include us receiving  paper documents and delivering  these  documents  directly
into the  customer's  enterprise  content  management  system.  Scanning  is the
process of converting a paper  document into a digital image saved in electronic
format  such as a TIFF or PDF file.  High-end  scanners  are similar to high-end
copiers with sheet feeders, but they output electronic files, not more paper. We
provide  the  ground  transportation  and secure  facility  for  processing  the
documents,  the trained staff for  processing  the  documents,  the expertise to
index,  scan and  categorize the  documents,  the expertise to  re-assemble  the
original documents in the format and order they were delivered and the expertise
to upload the documents and the indexing into the customer's  enterprise content
management system.  This often has to be done in less than 24 hours from receipt
of the document.

                                       24


         In its current configuration, our Huntington Beach facility can convert
25,000 images in an eight-hour  shift and 1,000,000 images per month running two
shifts. If we are able to secure additional financing, with additional equipment
and  reconfiguration,  this facility has the  capability  of processing  250,000
images in an eight-hour shift. Running two shifts at that capacity, the facility
could process 10,000,000 documents a month.

Domestic/Offshore Data Entry, OCR, and Indexing

         We use manual and optical character recognition  technologies to create
indexing for converted digital images.  Indexing of documents facilitates a more
efficient means of retrieving critical documents and information for future use.

         We have  ensured  higher  quality  assurance  standards by utilizing an
"Enter - Enter - Compare" process,  whereby two separate operators independently
index the same  document,  then compare  results  using  automated  systems.  If
discrepancies are found between the two separate operator versions, the batch is
immediately rejected and routed to a senior project manager for rework. This six
sigma quality control process guarantees clients a 99.5% accuracy rate.

         We perform  this service  in-house or offshore.  Services are priced by
the keystroke.  A typical healthcare claim form may require between 400 and 1000
keystrokes. With volumes in the millions, our customers may pay $0.01- $0.02 per
keystroke. We resell this work to offshore companies that perform this service.

Application Service Provider Hosting of Scanned Images

         Once images have been scanned,  end-users  need an  enterprise  content
management system such as Hyland Software's OnBase, Documentum or FileNet to use
the documents now in digital formats.  For customers that do not want to install
and maintain their own enterprise content management system, we resell web-based
document hosting application service provider services from our partners such as
Hyland Software's OnBase or Iron Mountain's Digital Archives.  This provides our
clients the  efficient and immediate  capability  of viewing  business  critical
documents on line.

In House Imaging Solutions (Hardware, Software, and Services)

         For customers  that want to use their digital  documents on an in-house
enterprise content management system, we provide multiple solutions based on the
clients needs. We offer system design,  professional services and implementation
required hardware and software.

Mailroom Outsourcing of Inbound Hardcopy or Electronic Mail

         The most  efficient  solution  for a customer  is for the  customer  to
outsource  the mail  handling  function to us. We  physically  retrieve the mail
directly from the post office through a post office box, sort,  scan and capture
key data fields from each document.  The scanned images and  corresponding  data
are uploaded directly to the customer's  enterprise content management or one of
our  application  service  provider  partners  systems for online viewing by the
customer's end user. This service is sold per piece of mail processed.

MARKET

Overall Business Process Outsourcing Market

         Goldman Sachs  estimates  the business  process  outsourcing  market at
potentially  $175-210  billion in annual  revenue  and  growing at a  compounded
annual  growth  rate of  roughly  20%,  more than twice the  projected  rate for
information technology spending.

                                       25


         According to an August 2003 Forrester  Research report, the US business
process  outsourcing  market will expand to $146  billion in 2008.  The trend is
towards  corporations  spending more of their information  technology budgets on
services. Rather than purchasing hardware, software and labor, companies can pay
a business  process  outsourcing  vendor like on a per document or job basis. In
this way, they do not carry the cost of infrastructure during unneeded periods.

         In  today's  highly   competitive,   unpredictable   and  fast-changing
marketplace,  organizations  are  challenged  with  improving  productivity  and
operational  efficiency with ever-shrinking  budgets.  Many executives find that
running the enterprise consumes the bulk of their energy. They lack the time and
resources to manage non-core, resource-intensive functions properly.

         As a  result,  many  organizations  are  pursuing  a  business  process
outsourcing  strategy  that  manages  these  non-strategic  business  processes.
Outsourcing operations can potentially provide substantial,  measurable benefits
right away.

         Allowing  business  process  outsourcing   suppliers  to  manage  these
non-strategic  operations provides  flexibility and makes  organizations  better
able to respond to new and existing business  opportunities.  Among the benefits
of a business process outsourcing strategy is the ability of the organization to
focus on its core competencies--initiatives that bring in revenue and facilitate
profitable growth.

         The scope of work for business  process  outsourcing  contracts  ranges
from basic  scanning and data entry,  also known as level one  business  process
outsourcing,  to  outsourcing  an entire  department,  which would be level five
business process outsourcing. We focus on level two and level three. Level three
business  process  outsourcing  is higher  margin  business  because it requires
complex data capture from multi-page  forms done by operators who are trained in
the customers  specific line of business and who are able to analyze,  interpret
and resolve discrepancies in our customers data.

Benefits Of Business Process Outsourcing

         o    Reduce costs-- business process outsourcing provides  quantifiable
              benefits through improved  efficiencies,  lower overhead,  reduced
              payroll and benefit expenses, and fewer capital investments.

         o    Improve   productivity   and  operational   efficiencies--Non-core
              business  processes,  such as  human  resources  and  finance  and
              accounting,    are   critical,   but   also    resource-intensive,
              time-consuming,   and  costly.  Outsourcing  improves  operational
              efficiencies and drastically reduces costs without large, up-front
              capital investments.

         o    Allow  organizations  to focus on their core  business--  business
              process outsourcing allows organizations to move non-core business
              processes  to a  services  provider  so that they may focus on the
              more important strategic,  revenue-generating programs that create
              profitable growth and sustain business success.

         o    Ensure best practices,  skills, and technology--  business process
              outsourcing  provides  access  to  proprietary  workflow  systems,
              process reengineering skills, and innovative staffing and delivery
              models, combined with proprietary technology delivered by experts.

                                       26


         o    Provide access to scalable  operations  and on-demand  resources--
              business process  outsourcing  provides the flexibility to respond
              to a rapidly changing  marketplace and scale operations up or down
              as  conditions   dictate.   In  a  business  process   outsourcing
              engagement,  the business  process  outsourcing  partner  delivers
              access    to   global    staff,    processes,    resources,    and
              technology--wherever and whenever they are needed.

         o    Strengthen  clients'   competitive   position--Organizations   can
              leverage a business process outsourcing  strategy to improve their
              financial and competitive  positions and differentiate  themselves
              from  competitors.   business  process   outsourcing   results  in
              efficient  operations,  access to global  capabilities  and faster
              time-to-market.

STRATEGY

         As companies look to outsource to overseas business process outsourcing
providers they encounter three problems that we solve. First,  finding the right
business process  outsourcing partner is difficult because few overseas business
process  outsourcing  providers have an extensive U.S. sales  presence.  Second,
many processes require information  technology integration and document scanning
to be done  domestically  in  order to be  performed  overseas.  Lastly,  in the
investigative  process  they often find  reasons  portions  of the process to be
outsourced must be done on-site, nearby or within the United States.

         Our core competencies are executive level sales skill, business process
outsourcing   project   management   expertise,   specialization  in  performing
high-speed,  high-quality  document scanning and  relationships  with all of the
partners necessary to deliver a complete solution on and off shore.

         Our experience  has shown that to sell and deliver a complete  business
process outsourcing  solution to a customer,  a company must engage a partner or
multiple partners during some part of the process of delivering the service.  We
have found that profitability in the business process outsourcing business comes
from  specialization.  We believe  that the  larger  companies  that  attempt to
provide all aspects of the  business  process  outsourcing  solution  internally
cannot  compete with  companies  that offer  multi-vendor  solutions.  Just like
information  technology hardware and software became unbundled into multi-vendor
solutions  in the  1980's  and  1990's,  the  trend in  outsourcing  is  towards
multi-vendor solutions.

         We hope to grow through mutually beneficial business relationships with
large  organizations that provide a complementary  piece of the business process
outsourcing  solution but also require the pieces that we provide.  The scope of
work for business process  outsourcing  contracts ranges from basic scanning and
data entry, also known as level one business process outsourcing, to outsourcing
an entire department, which would be level five business process outsourcing. We
focus on level two and  level  three  business  process  outsourcing.  Level two
business process outsourcing is higher margin business than level one because it
requires workers trained in the customers  specific line of business and who are
able to analyze,  interpret and resolve  discrepancies  in our  customers  data.
Level  three  business  process  outsourcing  is more  complex  data  entry from
multi-page  forms.  We plan  to  build  an  account  and  revenue  base  through
performing  level one business  process  outsourcing  services  domestically and
reselling  level  two  business  process  outsourcing   services  from  offshore
providers.

                                       27


SALES PROCESS

Our Value Proposition

         The Quintek Value Proposition is that we can  significantly  reduce our
customer's  current process  overhead.  We can change the customer's fixed costs
into  variable  costs and we can  deliver a higher  quality of service  than the
customer can achieve internally.

Our Target Account Profiles

         In the initial  stage of our  growth,  the sales team is putting 50% of
their effort into targeting large,  multi-year contracts and 50% of their effort
into closing smaller one-time jobs.

Direct Sales

         We currently  have one full-time  direct sales person.  We plan to grow
our direct  sales  program to cover  additional  major  markets.  The job of our
direct sales team is to identify  prospects before they have reached the request
for proposal stage,  know that these proposals are being sent out and to receive
and respond to them.

Template engagement team

         During our initial  expansion,  each region will need to have three key
personnel.

         Production  Manager.  Production  Manager is responsible for delivering
services to the customer.  This includes hiring and supervising production staff
and bringing projects in under budget.

         Project  Manager.  Project  Manager is  responsible  for supporting the
pre-sales  effort  involving the  development of proposals.  Project  Manager is
responsible  for post sales support,  customer  relations and  coordinating  the
initial  implementation  of new business.  Project  Manager is  responsible  for
working with Finance to order  equipment  based on the  day-to-day  needs of the
project.

         Senior  Sales  Representative.   The  Senior  Sales  Representative  is
responsible for identifying sales prospects, closing sales and is the customer's
main contact during implementation.

Leveraging Temporary Labor

         Our business model relies heavily on the use of temporary labor. Volume
of business can vary dramatically  from week to week.  Profitability is based on
not having any more full-time staff than is necessary.

Offshore Partners

         We currently have  deal-by-deal  relationships  with offshore  business
process outsourcing  providers.  We believe that there is no compelling business
reason to seek or offer an  exclusive  relationship  with an  offshore  business
process outsourcing provider. There are many skilled offshore providers.

                                       28


Sales Partnerships

FedEx/Kinko's

         On June 1, 2004,  we signed a sales  agreement  with FedEx  Kinko's,  a
division of FedEx Corp.  FedEx Kinko's  selected us as their preferred  document
imaging  and  document   scanning  partner  for  Kinko's  Western  Region.   The
partnership  also  allows the two  companies  to offer back  office  outsourcing
arrangements to deliver accuracy and efficiency.  Our services are a value added
upsell to the Kinko's  core line of  business.  The joint  business  development
strategy will primarily focus on active document digitizing as well as back-file
conversions in the insurance, healthcare, government and financial market space.
This  partnership  provides  clients a "single source" partner by combining back
office  outsourcing  solutions,  professional  services and document  conversion
services.

         FedEx Kinko's  sales team is reselling the following  services of ours;
(1)  high  speed  scanning  at  client  site  or  our  production   center,  (2)
domestic/offshore   data  entry,  optical  character  recognition  scanning  and
indexing,  (3) application  service provider  hosting of scanned images,  (4) in
house imaging solutions  (hardware,  software,  and services),  and (5) mailroom
outsourcing (inbound).

Single Source Partners

         On April 26, 2004, we signed an agreement with Single Source  Partners.
Single Source  Partners is a provider of mortgage  solutions  located in Newport
Beach, CA that supplies  business process  outsourcing  services in the mortgage
industry.   Single  Source  Partners  is  paid  by  financial   institutions  to
pre-qualify vendors and service providers.  Single Source Partners also receives
a finder's  fee from us in the event  that we close a sale with a referral  from
them.  Single Source  Partners and we have identified and are pursuing more than
$60 million in potential business from Single Source Partners' client companies.

         Single Source Partners  provides small and midsize  mortgage  companies
with  negotiated  volume pricing and special  service level  agreements.  Single
Source  Partners  receives a portion of the revenue that we bill from a referred
client. The next steps to move this relationship  forward are training at Single
Source Partners and expanding our production abilities to be positioned to serve
Single Source Partners' customers nationally.

GCAP Services, Inc.

         On July 2.  2004,  we signed an  agreement  with  GCAP  Services.  GCAP
Services  is a  management  consulting  firm  headquartered  in Irvine,  CA that
provides business process and systems redesign  solutions to the federal,  state
and local government sector.  Together, we can provide an end-to-end solution in
document management conversions for government clients.

         GCAP Services  provides  executive,  strategic and tactical  management
consulting  services.  They assist the Federal government and public agencies to
meet  compliance  requirements  by the design  and  implementation  of  business
systems and the establishment of new or streamlined procedures.

         A partial list of client that GCAP Services may be able to introduce to
us  includes  County of  Orange-California,  Judicial  Council of  California  -
Administrative   Office  of  the  Courts,   Los  Angeles   County   Metropolitan
Transportation  Authority,  Los Angeles City Community Redevelopment Agency, Los
Angeles County  Department of Public Works,  United States Navy - Naval Facility
Engineering Command.

                                       29


Iron Mountain

         On May 4, 2004,  we signed an agreement  to become a certified  imaging
partner  with Iron  Mountain  leading  provider  of Web based  document  hosting
solutions  to provide  our  clients  immediate  capability  of viewing  business
critical documents on line.

         Iron Mountain provides  outsourced  records and information  management
services.  Iron Mountain services more than 200,000 customer accounts throughout
the United  States,  Canada,  Europe and Latin  America.  Iron  Mountain  offers
records  management  services  for both  physical  and digital  media,  disaster
recovery support services, and consulting.

         This  agreement with Iron Mountain  primarily  offers the Iron Mountain
sales force our  business  process  outsourcing  services  while  enabling us to
resell web-based document hosting application  service provider services,  which
provide our clients the efficient and immediate  capability of viewing  business
critical documents on line.

Competition

         There are several companies  currently  providing  document imaging and
business process  outsourcing  services.  These competitors are a combination of
existing microfilm  conversion  service  providers,  scanning service providers,
document management system integrators,  and offshore data entry  organizations.
Most of the aforementioned  business process outsourcing  provider companies are
doing business on a local or regional level.  There are a few national providers
of  business  process  outsourcing  and  document  imaging  services,  including
Affiliated Computer Services of Dallas, TX, SourceCorp of Dallas, TX and EDS.


CHEMICAL-FREE MICROFILM BUSINESS UNIT

The Film-based Imaging Market

         The film-based  imaging market segment is the business  associated with
microfilm cameras,  film stock,  chemicals,  readers,  printers,  and associated
services.  This is a mature,  established  market that has been redefined by new
digital imaging technologies over the last decade.

Trends In the Film-based Imaging Market

         In June 2000,  the  Archivist  of the United  States,  John W.  Carlin,
announced  that  scanned  image  files  would be used  instead of  microfilm  to
preserve  individual  responses to the 2000 Census.  The Census Bureau  reversed
itself and decided to continue  using  microfilm.  The reasons cited for staying
with microfilm were ongoing  expense,  the risk of losing  critical data and the
advantage  of a human  readable  format with a potential  lifespan of 500 years.
Digital  archives  represent an ongoing  expense  because they require  constant
expensive  migration as digital  standards,  operating systems and media change.
During a migration,  there is additional risk of losing critical data. Microfilm
is  "future-proof"  because it is human  readable and  certified by the American
National Standards Institute to have a 500 plus year lifespan.

         For archive  documents,  film-based media remain  superior.  Film-based
archival  is less  expensive  than  digital  methods  and has a storage  life of
between 100 and 1000 years.  Film-based archival already has a massive installed
base of billions of documents accumulated over more than 50 years of use.

         By enabling the creation of microfilm  directly from digital files, our
products  marry  modern  digital  technologies  to the proven  best-practice  of
microfilm archival.

                                       30


The Document Lifecycle

         Digital  document  management  technology  is well  suited  for  active
documents that require high-availability. For archive documents, digital imaging
or document  management systems have been shown to be costly and unreliable as a
long-term solution.

         When the  document  is  created,  activity  is high -- it is being used
actively to make  decisions.  Issues during this stage include ease and speed of
access,  and the  ability to share  documents  across  networks.  At some point,
activity  drops  sharply and the  document  enters a phase when it must be kept,
sometimes for many years, when activity is very low; this is the archival stage.

         The issues at the archival  stage are entirely  different and relate to
safe,  long-term  storage.  Because the volumes are invariably  high during this
phase  both  space  and cost are major  issues.  Microfilm  is the only  proven,
permanent document storage media.

         We believe  that the future of this  marketplace  is in hybrid  systems
which bridge the gap between these two technologies.

The Aperture Card Market

         The  segment of the  film-based  imaging  market that  addresses  large
format  engineering  drawings is called the aperture  card market.  The aperture
card market is made up of hardware  and  software  manufacturers,  distributors,
maintenance service providers and media and consumables manufacturers.  Aperture
cards are produced by many departments of  transportation,  city and county plan
and permit offices,  power companies and federal  agencies such as the Bureau of
Land Management.  Aerospace  companies are required by the Department of Defense
to submit  documents in aperture  card format.  U.S.  Navy ships and  submarines
maintain their engineering drawings in aperture card format.

Wet vs. Dry Silver Film - Strategic Advantage

         Our products use "Dry Silver" film, which requires no chemicals.  Older
technologies  are  based  on "Wet  Silver"  film,  which  requires  the cost and
inconvenience of dealing with hazardous chemicals. We believe that once the need
for chemicals is removed, the advantages of film-based imaging will drive sales.
We also believe that creating awareness of a modern, desktop device that outputs
digital drawings to microfilm with no chemicals will drive sales.

         We  believe  that  there  is a  large  installed  base  of  Wet  Silver
technology  that is used in "print rooms." A print room is a dedicated area that
has the  specialized  film-processing  and aperture card assembly  areas and the
subsequent  ventilation and hazardous materials handling equipment.  Our product
eliminates the need for such print rooms and their on-going expense.

Product Overview

         Our principal  product is the Q4400 Desktop Aperture Card Printer.  The
Q4400 is used by  engineering  departments  to print  directly to aperture cards
from  digital  files  in  a  single  step  without  using   chemicals  for  film
development.  Our  solution  provides a stream of revenues  from the  following:
Q4400  Aperture  Card Printer and upgrades to that  system,  Quinplot  software,
maintenance and blank aperture card media

                                       31


         The Q4400 system is comprised of our QUINPLOT  Software Package and the
Q4400  Aperture  Card  Printer.  The QUINPLOT  Software and Q4400  Aperture Card
Printer  operate  together to provide a complete  system for producing  aperture
cards.

         The QUINPLOT  Software operates on a standard PC platform under Windows
2000,  or XP and  functions to interface  the user system and operator  with the
Q4400 printer.  The QUINPLOT  operates across the customer's  network similar to
any laser  printer and is  compatible  with all standard  vector and raster file
formats.  The  QUINPLOT  Software can be used to control and monitor a number of
related  functions,   including;  image  queuing,  graphics  workstation  (image
view/mark-up/edit),  password protection,  drawing release,  index data formats,
index data entry and all aspects of the  aperture  card  production  cycle.  The
QUINPLOT Software is designed to easily adapt to the client's existing workflow,
indexing methods and file formats.

         The Q4400 is packaged in a small,  self contained,  table-top box which
fits well into office, reprographics,  laboratory and CAD/CAM work environments.
The Q4400 printer uses a low power laser to record images directly on Dry Silver
film,  which  is  premounted  on blank  aperture  card  media  and  packaged  in
light-tight  cassettes.  The film is developed using a patented heat process and
therefore  requires no chemicals  and emits no toxins into the  atmosphere.  The
card is automatically labeled using an internal print/punch module. The Q4400 is
completely  automatic,  extremely  reliable and can operate unattended until the
blank aperture card media is depleted.

Cost Savings

         When  comparing  the  Q4400 to  alternative  aperture  card  production
methods,  the Q4400 saves the customer money in terms of reducing the following:
labor cost,  downtime,  hard cost (material),  floor space and maintenance cost.
Furthermore,  there are no  employee  health  hazards  from  chemical  fumes and
spills,  no liability from employee  exposure to  chemicals/fumes  and the added
benefit of a faster "time to market".

         When using direct output to aperture card, the user is expected to gain
cost  savings in many areas.  For some users,  the  security  issues  related to
having  immediate  on site drawing  conversion  completed in a secured area with
limited access may provide a great deal of value unrelated to volume.  Also, the
efficiency gained by eliminating the bottleneck  associated with service bureaus
and  conventional  conversion  results in a faster  "time to market" and greater
efficiencies for the resultant products, improving ones competitive position.

Useful Features/Benefits

         The following  provides a list of features of the Q4400 system:  direct
conversion to aperture card (i.e. no requirement for paper plots)  chemical-free
operation, fully automatic operation,  compatible with a wide variety of network
configurations,  compatible  with a wide  variety of image & text file  formats,
interface can be customized to address the customer's  unique  application and a
compact modular design.

         The following provides a list of benefits of the Q4400 system: provides
a dramatic  improvement in efficiency  (drawing  release & distribution,  design
review process,  check print and a back-up of digital data base),  reduced "time
to market"  improves user's  competitive  posture and it eliminates  health risk
from employee's exposure to chemicals and fumes.

                                       32


PATENTS AND TRADEMARKS

         The  Q4400  system  is  protected  under  the  following   patents  and
trademarks:

US Patents

         Patent            Expiration
         Number            Date             Name/Description
         ---------         ----------       ----------------

         4,794,224         04/09/07         Dry Film  Developer  for an Aperture
                                            Card Printer

         4,818,950         04/24/07         Low   Jitter    Phase-Locked    Loop
                                            (internal circuit board)
 
         4,841,343         03/25/08         Dry Film Development  Process for an
                                            Aperture Card Printer

Trademarks

         "Quintek" was registered on the Patent and Trademark  Office  principal
register as U.S. registration No. 2,604,712 on August 6, 2002.

SALES AND MARKETING

         Our chemical free microfilm  business unit is primarily  engaged in the
service and  maintenance  of the installed base of Q4300 and Q4400 aperture card
printers.  We sell  maintenance  contracts  on the  installed  base of  Q43/44XX
printers for $10,200. We sell upgrades to upgrade the installed base of printers
to Windows XP/2000 for $5000. We sell extended software features to the Q43/44XX
printers for $5000.

         We have  determined  that in order to grow  sales,  a  redesign  of the
Q43/44XX  printer is required.  We have determined that this investment would be
at  least  $250,000,  and  therefore,  we have  decided  that it is in our  best
interests to wait until our new Quintek Services  division is profitable  before
proceeding with investment in the Chemical-Free Microfilm technology.

MANUFACTURING

         Prior  to  March,   2003,  we  were  dependent  upon  Kitron/Bofos  for
manufacturing the 4305 printer.  Since March,  2003, all 4305 printers have been
made in our Idaho  facility.  As of this writing,  we have been unable to obtain
the tooling for the 43/44XX  printers  from Kitron.  Kitron  believes it is owed
$100,000  and will  not  return  our  property.  We  dispute  this  debt and are
attempting to resolve this matter as quickly as possible.

         Our  supplier  of  replacement  ribbons has  discontinued  that line of
business.  We are not currently in possession of tooling for  manufacturing  new
ribbons.  We have  determined that setting up new tooling for ribbons would cost
at least $20,000.

         We believe that the  Montpelier,  Idaho  facility  will be able to meet
current  demand for our  products  and  services.  We have been  working  with a
variety of suppliers  for Q4305 and other  parts.  These  suppliers  are located
throughout the United States. We believe that this will help to insure stability
and reduce risk through the lack of reliance upon any single supplier.

                                       33


COMPETITION

         We believe that we are the only manufacturer of a chemical-free desktop
aperture card printer. There are other aperture card printing devices available.
Both of the competitive devices we are aware of are manufactured  outside of the
United  States by Microbox AG,  based in Germany and Wicks and Wilson,  based in
the United Kingdom. This product is a large unit that weighs roughly 772 pounds.
To our knowledge,  the CADMIC Plotter  produced by Microbox is currently sold in
the United States by only one distributor.

         Wicks and Wilson,  based in the United  Kingdom,  also  manufactures an
aperture  card  plotter.  Their  product is  similar  in size to the  Q4400.  It
requires the constant  replenishment  and disposal of hazardous  chemicals,  has
specialized  ventilation,  plumbing and  electrical  requirements,  and is labor
intensive to operate.

                            DESCRIPTION OF PROPERTIES

         We maintain  our  principal  office at 17951 Lyons  Circle,  Huntington
Beach,  California  92647. Our telephone number at that office is (714) 848-7741
and our facsimile number is (714) 848-7701. We lease 7,090 square feet of office
space.  The lease expires on June 30, 2008,  and we hold an option to extend the
lease for an additional  four years.  The monthly rent is $7,485.72.  We believe
that our current  office space and facilities are sufficient to meet our present
needs and do not anticipate any  difficulty  securing  alternative or additional
space, if needed, on terms acceptable to us.

         We rent,  on a  month-to-month  basis,  1,800 square feet of office and
warehouse  space at 720 N. 4th Street,  Montpelier,  Idaho,  to manufacture  our
products and service our customers. Our current monthly rent is $1,384.

                                LEGAL PROCEEDINGS

            From time to time,  we may become party to litigation or other legal
proceedings  that  we  consider  to be a part  of  the  ordinary  course  of our
business.  Except as described  below,  we are not  involved  currently in legal
proceedings  that could reasonably be expected to have a material adverse effect
on our business, prospects, financial condition or results of operations. We may
become involved in material legal proceedings in the future.

         On April 16, 2004, Decision One Corporation filed suit in the County of
Bannock,  Idaho  against  us for  $22,661.56  for goods  provided.  Since  2000,
Decision One  (formerly  Imation) has been both a vendor to us and a reseller of
our Q4300  Printers.  We filed a counterclaim  on August 1, 2004. We assert that
Decision One used their authority as a dealer of our product to disparage us, in
violation of their dealer agreement and we lost hundreds of thousands of dollars
in business because of it.


                                       34


                                   MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

         The  following  information  sets forth the names of our  officers  and
directors, their present positions with us, and their biographical information.


Name                           Age              Office(s) Held
----------------------         --------         ------------------------------

Robert Steele                    38             Chief Executive Officer and
Director

Robert Brownell                  49             President

Andrew Haag                      37             Chief Financial Officer and
Director

Robert Steele, Age 38, Chief Executive Officer and Director 
----------------------------------------------------------- 

Robert Steele has been our Chief Executive Officer,  President,  and Chairman of
the Board of Directors  since  January 30, 2003.  From 1999 to 2001,  Mr. Steele
served as the Chief  Executive  Officer of ibrite,  Inc.,  a mobile  information
management software company.  For nine years, from 1988 through 1998, Mr. Steele
served  as  Corporate  Vice  President  &  Chief  Technology  Officer  for  CADD
Microsystems,  Inc.,  a leading  provider  of  Autodesk  Computer  Aided  Design
software,  consulting,  training and integration services in the Washington,  DC
Metropolitan  Area. Mr. Steele  received a Bachelor of Science in Electronic and
Computer Engineering from George Mason University in 1988.

Robert Brownell, Age 49, President
----------------------------------

Robert  Brownell has been our President  since March 2004. From 2000 until 2004,
Mr. Brownell was Senior Vice President at ImageMax, Inc. of Fort Washington, PA,
a national  provider  of  document  and  information  management  services  with
revenues of more than $40 million  dollars.  From 1991 to 1999, Mr. Brownell was
Vice President, Worldwide Channel Sales for Document Control Solutions, Inc., of
Fullerton,  CA, a. document management systems integration  company. He received
the FileNET  Dealer of the Year award in 1997. In the 1980's,  Mr.  Brownell was
Branch  Manager,  TAB  Products  Company  of Los  Angeles,  CA,  a  records  and
information  management systems for active documents.  Mr. Brownell has a degree
in  Business  Administration  and  Marketing  Management  from Mount San Antonio
College.

Andrew Haag, Age 37, Chief Financial Officer and Director 
--------------------------------------------------------- 

Andrew Haag has been our Chief  Financial  Officer and a Director  since January
31, 2003.  Prior to that,  from  December  2002,  he was employed by the Camelot
Group,  Inc., an investment banking firm. From May 2001 until November 2001, Mr.
Haag was employed by  Aquasearch,  Inc.,  a publicly  held  microalgae  products
company.  From  November  1998  through  April  2001 he was  employed  by Nutmeg
Securities,  Ltd.  From  June 1998 through  October 1998 Mr. Haag was a Managing
Director of Waldron & Co. Inc., an investment bank located in Irvine, CA.

         From  1992  through  1998  he  was  employed  by  Auerbach,   Pollak  &
Richardson,  an  investment  banking firm,  located in Stamford,  CT and Beverly
Hills,  CA, rising to Managing  Director.  Mr. Haag  attended the  University of
Maine and CUNY Hunter College. Mr. Haag holds a Series 7 and a Series 63 license
from the Securities and Exchange Commission.

                                       35


Committees of the Board Of Directors 
------------------------------------ 

         None.

Terms of Office 
--------------- 

         Our  directors  are  appointed for a one-year term to hold office until
the next  annual  general  meeting of the  holders of our common  stock or until
removed from office in accordance  with our by-laws.  Our officers are appointed
by our  board of  directors  and  hold  office  until  removed  by our  board of
directors.

EXECUTIVE COMPENSATION

         The following  tables set forth certain  information  regarding our CEO
and each of our most  highly-compensated  executive  officers whose total annual
salary  and bonus for the  fiscal  years  ending  June 30,  2004,  2003 and 2002
exceeded $100,000:


                                                               SUMMARY COMPENSATION TABLE

                                                                  ANNUAL COMPENSATION

                                                             Other
                                                             Annual      Restricted     Options      LTIP
   Name & Principal                Salary        Bonus       Compen-       Stock         SARs       Payouts      All Other
       Position           Year       ($)          ($)        sation ($)   Awards($)       (#)         ($)      Compensation
------------------------ ------- ------------ ------------ ------------ ------------- ----------- ------------ --------------
                                                                                       
Robert Steele             2004    72,000           0             -            -            -            -             -
  Chief Executive         2003    30,000 (3)       0         2,500 (1)        -            -            -             -
  Officer                 2002        -            0             -            -            -            -             -
------------------------ ------- ------------ ------------ ------------ ------------- ----------- ------------ --------------
Robert Brownell           2004    37,500 (4)       0             -            -            -            -             -
  President               2003        -            0             -            -            -            -             -
                          2002        -            0             -            -            -            -             -
------------------------ ------- ------------ ------------ ------------ ------------- ----------- ------------ --------------
Tom Sims                  2004        -            0             -            -            -            -             -
  President               2003    19,400           0         1,570 (1)        -            -            -             -
                          2002    19,500           0         6,106 (1)    $68,000 (2)      -            -             -


(1)  Represent payments for automobile and health insurance.

(2)  Represents an issuance of 200,000 shares of restricted  common stock valued
     at $0.06 per share and 800,000 shares of restricted  common stock valued at
     $0.07 per share.

(3)  Represents  compensation  received  by  Mr.  Steele  while  serving  as our
     President & CEO from 2/1/03 to 6/30/03.

(4)  Represents  compensation  received  by Mr.  Brownell  while  serving as our
     President from 3/12/04 to 6/30/04

Employee Stock Incentive Plan

         The 2004 Stock  Option  Plan was adopted by the board of  directors  on
March 30,  2004 and  approved by the  shareholders  on June 30,  2004.  The Plan
provides for the issuance of up to 5,000,000 options.

                                       36


Option Grants to the Named Executive Officers and Directors as of July 31, 2004:

         None.

         Under the plan, options may be granted which are intended to qualify as
incentive stock options, or ISOs, under Section 422 of the Internal Revenue Code
of 1986,  as amended,  or which are not intended to qualify as  incentive  stock
options  thereunder,  or  Non-ISOs.  The 2002 Stock Option Plan and the right of
participants  to  make  purchases  thereunder  are  intended  to  qualify  as an
"employee stock purchase plan" under Section 423 of the Internal Revenue Code of
1986,  as  amended.  The 2002  Stock  Option  Plan is not a  qualified  deferred
compensation  plan under Section 401(a) of the Internal  Revenue Code and is not
subject to the  provisions  of the Employee  Retirement  Income  Security Act of
1974.

Purpose

         The  purpose  of  the  2004  Stock   Option  Plan  is  to  enhance  our
profitability  and value for the  benefit  of our  stockholders  principally  by
enabling us to offer our  employees and  consultants  and our  subsidiaries  and
non-employee directors stock-based incentives in us in order to attract,  retain
and reward such  individuals  and strengthen  the mutuality of interest  between
such individuals and our stockholders.

Eligibility

            All  our  employees  and  consultants  and  our   subsidiaries   and
non-employee  directors  designated by our Board of Directors to  participate in
the 2004 Stock Option Plan are eligible to receive  options under the 2004 Stock
Option Plan.

Available Shares

            Options covering a maximum of 11,822,500  shares of common stock may
be issued under the 2004 Stock Option Plan. If an option expires,  terminates or
is  cancelled,  the unissued  shares of common stock  subject to the option will
again be available under the 2004 Stock Option Plan.

Terms of Stock Options

            Under the 2004 Stock Option Plan,  options  granted to employees may
be in the form of incentive stock options or nonqualified stock options. Options
granted to consultants or non-employee  directors may only be nonqualified stock
options.  The  committee  that  administers  the 2004  Stock  Option  Plan  (see
Administration  below)  (the  Committee)  will  determine  the  number of shares
subject to each option,  the term of each option (which may not exceed ten years
or, in the case of an incentive stock option granted to a 10% stockholder,  five
years),  the  exercise  price per share of stock  subject  to each  option,  the
vesting  schedule  (if any) and the  other  material  terms  of the  option.  No
incentive  stock  option may have an  exercise  price less than 100% of the fair
market value of the common stock at the time of the grant (or, in the case of an
incentive  stock option  granted to a 10%  stockholder,  110% of the fair market
value).  The exercise price of a nonqualified stock option will be determined by
the Committee.

            The  option  price  upon  exercise  may be paid in  cash  or,  if so
determined  by the  Committee,  in shares of common  stock by a reduction in the
number of shares of common stock  issuable upon the exercise of the option or by
such other method as the Committee  determines.  Options may be made exercisable
in  installments,  and the  exercisability  of options may be accelerated by the
Committee.  The  Committee  may at any time  offer to buy an  option  previously
granted  on such  terms and  conditions  as the  Committee  establishes.  At the

                                       37


discretion of the Committee, options may provide for reloads (i.e., a new option
is granted for the same number of shares as the number used by the holder to pay
the option  price upon  exercise).  Subject to limited  exceptions,  options are
forfeited upon termination of employment or service.  Options are not assignable
(except by will or the laws of descent and distribution).

            Options may not be granted after the tenth  anniversary  of the 2004
Stock Option Plan's adoption.

Change in Control

            Unless  otherwise  determined  by the  Committee  at the time of the
grant,  upon a change in control (as defined in the 2004 Stock Option Plan), all
of the options  automatically  will become fully  exercisable.  However,  unless
otherwise  determined by the Committee at the time of the grant, no acceleration
or exercisability of an option will occur, if the Committee  determines prior to
a change in  control  that the  option  will be honored or assumed or new rights
substituted immediately following the change in control;  provided that, the new
rights or alternative  option is based on stock which is or will be traded on an
established securities market, contains at least substantially  equivalent terms
and conditions as the option being assumed, and has substantially equal earnings
value.

Certain Reorganizations

            The 2004 Stock Option Plan provides for  appropriate  adjustments of
the number and kind of shares to be issued upon exercise of an option and of the
exercise price to reflect changes in the capital  structure of the  corporation,
stock splits, recapitalizations, mergers and reorganizations.

Amendment or Termination of the 2004 Stock Option Plan

            The 2004 Stock  Option Plan may be amended by the Board of Directors
of the Company,  except that stockholder approval of amendments will be required
among other  things (a) to the extent  stockholder  approval is required by Rule
16b-3 under the Exchange  Act,  and (b) to (i)  increase  the maximum  number of
shares  subject  to  options   granted  in  a  fiscal  year,   (ii)  change  the
classification of employees eligible to receive awards, (iii) extend the maximum
option  period under the 2004 Stock Option Plan,  or (iv) increase the number of
shares  that may be issued  under the 2004  Stock  Option  Plan.  The 2004 Stock
Option Plan is effective  for ten years from the date the 2004 Stock Option Plan
was adopted during which time options may be granted.

Administration

            The 2004 Stock Option Plan will be  administered  by the  Committee,
However, with respect to option grants to non-employee  directors and any action
under the 2004  Stock  Option  Plan  relating  to options  held by  non-employee
directors,  the  Committee  will consist of the entire Board of  Directors.  The
Committee will determine the  individuals who will receive options and the terms
of the options,  which will be reflected in written agreements with the holders.
Decisions by the Board of Directors  or the  Committee  with respect to the 2004
Stock Option Plan are final and binding.

Federal Income Tax Consequences

            Incentive Stock Options.  An optionee will not recognize income upon
the grant or exercise of an incentive stock option.  Instead,  the optionee will
be taxed at the time he or she sells the stock purchased pursuant to the option.
The optionee  will be taxed on the  difference  between the price he or she paid
for the  stock and the  amount  for  which he or she  sells  the  stock.  If the

                                       38


optionee  does not sell the stock within two years from the date of grant of the
option and one year from the date the stock is transferred to the optionee,  the
gain will be a long-term capital gain, and the Company will not be entitled to a
deduction.  If the  optionee  sells the stock at a gain prior to that time,  the
difference  between the amount the optionee paid for the stock and the lesser of
the fair market  value on the date of exercise or the amount for which the stock
is sold will be taxed as ordinary  income and the Company  will be entitled to a
corresponding  deduction.  If the  stock is sold for an  amount in excess of the
fair market  value on the date of exercise,  the excess  amount will be taxed as
capital gain. If the optionee sells the stock for less than the amount he or she
paid for it, the loss will be taxed as a capital loss.  Exercise of an incentive
stock option may subject an optionee to, or increase an optionees liability for,
the alternative minimum tax.

            Non-Qualified  Stock Options.  An optionee will not recognize income
upon the grant of a non-qualified  stock option under the 2004 Stock Option Plan
or at any  time  prior to the  exercise  of the  option  or a  portion  thereof.
Generally,  at the time the optionee exercises a non-qualified option or portion
thereof, the optionee will recognize  compensation taxable as ordinary income in
an amount equal to the excess of the fair market value of the  underlying  stock
on the date the option is  exercised  over the option price of the stock and the
Company will then be entitled to a  corresponding  deduction.  At that time, the
Company will be subject to income tax withholding requirements and will have the
right to require an  optionee  who is or was an employee of the Company to remit
in cash to the Company an amount  sufficient  to satisfy any federal,  state and
local tax requirements  prior to the delivery of any certificate or certificates
for such shares of stock.

            A subsequent taxable disposition of the stock acquired upon exercise
of an option and held as a capital  asset will result in a capital  gain or loss
measured by the  difference  between  the fair market  value of the stock on the
date of the option exercise and the amount realized on later disposition.

Compensation Of Directors 
------------------------- 

         All of our directors are full time  employees of ours.  Because we have
no  independent  directors,  we pay no  compensation  to any directors for their
service on the board over and above their employment compensation.  There are no
family relationships among the directors or executive officers.

Employment Agreements
---------------------

Robert Steele

         We entered into an employment  agreement  with Robert Steele on January
31, 2003 to serve as our Chief  Executive  Officer.  The  agreement  is for five
years, with a base salary of $72,000 per annum, plus benefits.

Andrew Haag

         We entered into an employment agreement with Andrew Haag on January 31,
2003 to serve as our Chief Financial  Officer.  The agreement is for five years,
with a base salary of $72,000 per annum, plus benefits.

Robert Brownell

         We entered into an employment  agreement with Robert  Brownell on March
12, 2004 to serve as our President. The agreement is for four years, with a base
salary of $12,500 per month, plus benefits.  In addition, if our quarterly gross
revenue  meets or exceeds the  following  amounts,  Mr.  Brownell's  salary will
increase as indicated:

                                       39


         Gross Revenues                              Salary (per month)
         --------------                              ------------------

         $900,000                                    $15,000
         $1,200,000                                  $18,000
         $1,500,000                                  $24,000

         If our quarterly gross revenues  decrease,  Mr.  Brownell's base salary
will  decrease  accordingly,  subject to the minimum  base salary of $12,500 per
month.


                 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         On April 26, 2004,  Quintek  issued a convertible  note for $100,000 in
cash to an accredited  investor.  The note bears 10% simple interest and matures
one year from the above date.  The note  converts  into common  stock at $0.06 a
share. (Zubir Kazi)

         On June 7, 2004,  Quintek issued a convertible note titled for $100,000
in cash to an  accredited  investor.  The note  bears 10%  simple  interest  and
matures one year from the above date.  The note  converts  into common  stock at
$0.06 a share. (Zubir Kazi)

         On  November  26,  2003,  Quintek  issued a  warrant  to an  accredited
investor to purchase  8,333,333 shares of Quintek common stock at an of exercise
price  $0.06,   expiring  November  26,  2008,  in  consideration  for  $500,000
investment in convertible notes. (Zubir Kazi)

         On July 23, 2003,  Quintek issued a warrant to TJ&K  Investment  Trust,
LLC to purchase  142,857  shares of Quintek Common Stock at an exercise price of
$0.13,  expiring July 23, 2006 in  consideration  for a stock loan to Quintek of
1,428,572  shares of common stock. In additional  consideration  for the loan of
stock from the  lender,  Quintek  released  the lender from a lock up on 285,714
shares of common stock. (Kurt Kunz)

         On November 6, 2003, Quintek issued a warrant to TJ&K Investment Trust,
LLC to purchase 1,100,000 shares of Quintek Common Stock at an exercise price of
$0.175,  expiring  November 6, 2008 in consideration for a stock loan to Quintek
of 1,100,000 shares of common stock. (Kurt Kunz)

                  Changes in Registrant's Certifying Accountant

         On March 15, 2004, we received a letter dated March 8, 2004 from Heard,
McElroy &Vestal resigning as our independent public accountants. The decision to
resign  by  Heard,  McElroy  &Vestal  did not  involve  a  dispute  with us over
accounting  policies or  practices.  On March 24, 2004,  we  appointed  Kabani &
Company,  Inc.,  Certified  Public  Accountants  as our new  independent  public
accountants.  The  decision to retain  Kabani & Company was made by our Board of
Directors.

         The reports of Heard,  McElroy & Vestal on our financial statements for
the year ended June 30, 2003 did not contain an adverse opinion or disclaimer of
opinion,  nor was it  qualified  or modified as to  uncertainty,  audit scope or
accounting principles.

         During our fiscal year ended June 30, 2003,  and through March 8, 2004,
there  were no  disagreements  with  Heard,  McElroy  &Vestal  on any  matter of
accounting principles or practices,  financial statement disclosure, or auditing
scope or  procedure,  which  disagreements  if not  resolved  to Heard,  McElroy
&Vestal's  satisfaction,  would  have  caused  Heard,  McElroy  &Vestal  to make
reference  to the subject  matter of the  disagreement  in  connection  with its
report on the financial statements for such year.

                                       40


         During our fiscal year ended June 30, 2003, and through March 15, 2004,
there were no reportable  events (as defined in Item  304(a)(1)(v) of Regulation
S-K).

         We provided Heard, McElroy &Vestal with a copy of our Item 4 disclosure
on a Form  8-K  and  we  requested  that  Heard,  McElroy  &Vestal  review  such
disclosures  and  provide a letter  addressed  to the  Securities  and  Exchange
Commission  as specified by Item  304(a)(3) of  Regulation  S-K. Such letter was
filed  as  Exhibit  16.1 to our  Current  Report  on Form  8-K  filed  with  the
Securities and Exchange Commission on March 25, 2004.

         During the fiscal year ended June 30, 2003, and the subsequent  interim
period up to March 8, 2004,  we did not consult with Kabani & Company  regarding
(i) the application of accounting principles to a specified transaction,  either
completed  or proposed;  or the type of audit  opinion that might be rendered on
our  financial  statements,  and neither a written  report was provided to us or
oral advice was  provided  that the new  accountant  concluded  was an important
factor considered by us in reaching a decision as to the accounting, auditing or
financial  reporting;  or (ii) any  matter  that was  either  the  subject  of a
disagreement  or a reportable  event,  as described  in Item  304(a)(1)(iv)  and
(a)(1)(v) of Regulation S-K.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following table sets forth certain information regarding beneficial
ownership of our common stock as of November 18, 2004

         o    by each person who is known by us to beneficially own more than 5%
              of our common stock;
         o    by each of our officers and directors; and
         o    by all of our officers and directors as a group.

                                       41




Name and Address                    Amount and Nature            Percent Prior     Percent After
Of Beneficial Holder                of Beneficial Ownership (1)  to Offering (2)    Offering (3)
--------------------                -----------------------       -------------     ----------

                                                                               
Robert Steele                         3,275,297 (4)                4.26%              2.50%
17951 Lyons Circle
Huntington Beach, CA 92647

Robert Brownell                         861,062 (5)                1.16%                 *
17951 Lyons Circle
Huntington Beach, CA 92647

Andrew Haag                           3,275,297 (6)                4.26%              2.50%
17951 Lyons Circle
Huntington Beach, CA 92647

Executive Officers and Directors      7,411,656 (7)                9.15%              5.49%
As A Group (3 persons)

Kurt Kunz                             3,825,429 (8)                5.11%              2.97%
17951 Lyons Circle
Huntington Beach, CA 92647

Zubair Kazi                          7,816,377 (9)                 9.90%              9.90% (9)
A-1-A Estate Thomas
St. Thomas, U.S. Virgin Islands 00802

Langley Park Investments PLC         14,000,000                   19.03%             10.97%
30 Farringdon Street
London EC4A 4HJ U.K.

David W. Gough                       4,400,000 (10)                5.64%              3.33%
1180 Sir William Lane
Lake Forest, IL 60045

Gerald Hannahs                       5,000,000 (11)                6.36%              3.77%
17710 Leatha Lane
Little Rock, AR 72223


* Less then one percent.

(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.  Shares of common stock subject to options or
warrants  currently  exercisable or  convertible,  or exercisable or convertible
within 60 days of November 18, 2004 are deemed  outstanding  for  computing  the
percentage  of the person  holding  such  option or  warrant  but are not deemed
outstanding for computing the percentage of any other person.

(2) Percentage based on 73,574,000 shares of common stock outstanding.

(3) Percentage based on 127,632,334 shares of common stock outstanding.

(4)  Includes  2,275,297  shares  that may be  acquired  upon  exercise of stock
options  exercisable  within 60 days and  1,000,000  shares that may be acquired
upon the conversion of shares of Series A Convertible Preferred Stock.

(5) Includes  611,062 shares that may be acquired upon exercise of stock options
exercisable  within 60 days and 250,000  shares  that may be  acquired  upon the
conversion of shares of Series A Convertible Preferred Stock.

                                       42


(6)  Includes  2,275,297  shares  that may be  acquired  upon  exercise of stock
options  exercisable  within 60 days and  1,000,000  shares that may be acquired
upon the conversion of shares of Series A Convertible Preferred Stock.

(7)  Includes  5,161,656  shares  that may be  acquired  upon  exercise of stock
options  exercisable  within 60 days and  2,250,000  shares that may be acquired
upon the conversion of shares of Series A Convertible Preferred Stock.

(8)  Includes  1,242,857  shares  that may be  acquired  upon  exercise of stock
options exercisable within 60 days.

(9) Kazi  Management  VI,  LLC holds  2,437,072  shares  and  $500,000  in notes
convertible into common stock at $0.06.  Upon full conversion of the notes, Kazi
Management  VI will  receive  8,333,333  shares of common stock and a warrant to
purchase  one  share  of  common  stock  for  each  conversion  share  at  $0.06
exercisable  within five years.  Kazi  Management  VI does not have the right to
convert any portion of the Notes or Warrants that would cause Kazi Management VI
to be deemed the beneficial owner of more than 9.9% of our outstanding shares of
Common  Stock.  Therefore,  Kazi  Management  VI is only in control of 7,701,664
shares at the time of the offering but will be in control of more shares,  up to
9.9% after the offering.

(10) Includes 2,200,000 shares underlying convertible notes and 2,200,000 shares
that may be acquired upon exercise of stock options exercisable within 60 days.

(11)  Includes  5,000,000  shares  that may be acquired  upon  exercise of stock
options exercisable within 60 days.


                            DESCRIPTION OF SECURITIES

COMMON STOCK

         We are authorized to issue up to 200,000,000 shares of Common Stock, no
par value. As of November 18, 2004, there were 73,574,000 shares of common stock
outstanding.  Holders of the common  stock are entitled to one vote per share on
all matters to be voted upon by the  stockholders.  Holders of common  stock are
entitled to receive  ratably such  dividends,  if any, as may be declared by the
Board  of  Directors  out  of  funds  legally  available   therefor.   Upon  the
liquidation,  dissolution,  or winding up of our company,  the holders of common
stock are  entitled  to share  ratably  in all of our assets  which are  legally
available for distribution  after payment of all debts and other liabilities and
liquidation  preference of any outstanding common stock. Holders of common stock
have  no  preemptive,   subscription,   redemption  or  conversion  rights.  The
outstanding  shares  of  common  stock  are  validly  issued,   fully  paid  and
nonassessable.

         We have engaged  Interwest  Transfer Company,  as independent  transfer
agent or registrar.

                                       43


PREFERRED STOCK

         We are authorized to issue 50,000,000 shares of preferred stock, no par
value  per  share.  As of  November  18,  2004,  ther were  4,679,134  shares of
preferred  stock issued and  outstanding.  The shares of preferred  stock may be
issued in series,  and shall have such voting  powers,  full or  limited,  or no
voting powers,  and such designations,  preferences and relative  participating,
optional  or  other  special   rights,   and   qualifications,   limitations  or
restrictions  thereof,  as shall be stated and  expressed in the  resolution  or
resolutions  providing  for the issuance of such stock adopted from time to time
by the board of directors.  The board of directors is expressly  vested with the
authority to determine and fix in the  resolution or  resolutions  providing for
the issuances of preferred  stock the voting powers,  designations,  preferences
and rights, and the qualifications, limitations or restrictions thereof, of each
such series to the full  extent now or  hereafter  permitted  by the laws of the
State of California.

Series A Preferred Stock

The general terms of the Series A Preferred  Stock is as follows:  no par value;
Liquidation  Preference - $0.25 per share plus any unpaid accumulated dividends;
Dividends -  cumulative  annual rate of $0.005 per share when and as declared by
the Board of Directors; Conversion Rights - convertible to common stock at a 1:1
ratio;  Redemption Rights - we have the right to redeem part or all of the stock
upon 30 days  written  notice at a rate of $0.25 per share plus all  accumulated
and unpaid dividends  thereon at the dividend rate of $0.005 annually per share;
Voting Rights - one vote per share on all matters requiring shareholder vote. As
of November 18, 2004,  there were 3,980,931  shares of Series A Preferred  Stock
outstanding.

Series B Preferred Stock

The general terms of the Series B Preferred  Stock is as follows:  no par value;
Liquidation  Preference - $0.25 per share plus any unpaid accumulated dividends;
Dividends - cumulative  annual rate of $0.0005 per share when and as declared by
the Board of Directors; Conversion Rights - convertible to common stock at a 1:5
ratio (i.e. 1 share of Series B Preferred stock is convertible  into 5 shares of
common stock) ;  Redemption  Rights - we have the right to redeem part or all of
the stock  upon 30 days  written  notice  at a rate of $0.25 per share  plus all
accumulated  and  unpaid  dividends  thereon  at the  dividend  rate of  $0.0005
annually per share;  Voting Rights - one vote per share on all matters requiring
shareholder vote. As of November 18, 2004, there were 680,255 shares of Series B
Preferred Stock outstanding.

Series C Preferred Stock

The  general terms of the Series C Preferred Stock is as follows:  no par value;
Liquidation  Preference  - $1.00 per share plus any  unpaid  accumulated
dividends;  Dividends  -  cumulative  annual  rate of $.0005  per share  when as
declared by the Board of Directors; Conversion Rights - 1:20 ratio (i.e. 1 share
of  Preferred  Series C stock is  convertible  into 20 shares of common  stock);
Redemption Rights - we have the right to redeem part or all of the stock upon 30
days  written  notice at the rate of $1.00 per share  plus all  accumulated  and
unpaid  dividends  thereon at the dividend  rate of $.0005  annually per share.;
Voting Rights - one vote per share on all matters requiring shareholder vote. As
of November 18,  2004,  there were  17,948  shares of Series C  Preferred  Stock
outstanding.

                                       44


WARRANTS

         In connection with a Securities  Purchase  Agreement dated August 2004,
the  accredited  investor was issued  3,000,000  warrants to purchase  shares of
common  stock.  The  warrants are  exercisable  until two years from the date of
issuance at a purchase price of $1.00 per share.

         In  connection  with several Note  Purchase  Agreements we entered into
with  several  accredited  investors,  we  issued  an  aggregate  of  12,066,667
warrants.  Of these  warrants,  9,166,667  warrants are exercisable at $0.10 per
share;  2,200,000  warrants  are  exercisable  at $0.12 per  share  and  700,000
warrants are exercisable at $0.15 per share.

         In  connection  with a promissory  note issued on October 16, 2004,  we
issued 5,000,000 warrants, exercisable at $0.15 per share.

         In  connection  with a stock  purchase  agreement  we  entered  into on
September  15, 2004,  we issued  1,000,000  warrants,  exercisable  at $0.13 per
share.

CONVERTIBLE SECURITIES

         To obtain  funding  for our  ongoing  operations,  we entered  into the
following transactions involving convertible securities:

1)       On September 26, 2003 we entered into a Note Purchase Agreement with an
individual  investor.  This investor  purchased five convertible notes, each for
$100,000,  for a total purchase price of $500,000.  The  convertible  notes bear
interest at 10% per annum. These notes are convertible into shares of our common
stock at a price of $0.06. In connection with this Note Purchase Agreement,  the
investor will receive up to 9,166,667  warrants  exercisable  at $0.10 per share
and expiring on September 26, 2008, with the investor  receiving one warrant for
every share converted under the convertible  notes.  This prospectus  relates to
the resale of the common stock underlying these convertible notes and warrants.

2)       On July 11, 2004 we entered into a Securities  Purchase  Agreement with
an individual investor.  This investor purchased a convertible note for $20,000.
On August 31, 2004,  the holder  converted  this note into 200,000 shares of our
common stock. In connection with this Securities Purchase  Agreement,  we issued
the investor 200,000 warrants,  exercisable at $0.15 per share,  which expire on
July 11, 2007. This prospectus  relates to the resale of the common stock issued
upon  conversion  of the  convertible  note  and  the  shares  of  common  stock
underlying the warrants.

3)       On July 27, 2004 we entered into a Securities  Purchase  Agreement with
an individual investor.  This investor purchased a convertible note for $50,000.
On August 31, 2004,  the holder  converted  this note into 500,000 shares of our
common stock. In connection with this Securities Purchase  Agreement,  we issued
the investor 500,000 warrants,  exercisable at $0.15 per share,  which expire on
July 27, 2007. This prospectus  relates to the resale of the common stock issued
upon  conversion  of the  convertible  note  and  the  shares  of  common  stock
underlying the warrants.

4)       On July 29,  2004,  we entered  into an  Agreement  with  Langley  Park
Investments PLC, a London  investment  company to issue 14,000,000 shares of our
common  stock to Langley  Park  Investments  in return for  1,145,595  shares of
Langley.  Fifty  percent of Langley Park  Investments  shares issued to us under
this agreement are to be held in escrow for two years.  At the end of two years,
if the market price for our common stock at or greater than the initial  closing
price,  the escrow agent will  release the  remaining  Langley Park  Investments
shares to us. In the event  that the market  price for our common  stock is less
than the initial closing price the amount released will be adjusted.

                                       45


         Langley Park  Investments'  initial  offering  price was 1(pound)  (One
Pound UK per share). Our shares are to be held by Langley Park Investments for a
period of at least two years.  Langley Park Investments' shares issued to us are
free trading. Langley Park Investment Trust Plc was admitted to the Full List of
The London Stock  Exchange on September 30, 2004 and dealings in Langley  shares
commenced on October 7, 2004.

5)       On August 2, 2004,  we signed a Master  Lease  Agreement  with  Vencore
Solutions,  LLC, a venture leasing company located in Lake Oswego, Oregon. Under
the  agreement,  we  established  a lease line of credit for up to  $240,000  in
equipment  financing.  This is a capital lease,  whereby we pay a monthly rental
rate  equal to 3.45% of the  total  hardware  purchases  and  6.35% of the total
software  purchases.  The lease term for hardware  purchases is 36 months and 18
months for software. The effective annual interest rate is roughly 8%. Purchases
made  will be  recognized  both as an asset  and as a  liability  (for the lease
payments) on the balance sheet.  At the end of the lease,  we have the option to
purchase the equipment or return it. Vencore Solutions received 144,000 warrants
to purchase our common stock at $0.10, expiring on August 2, 2007.

6)       We entered  into a Securities  Purchase  Agreement  with an  accredited
investor in August 2004 for the sale of (i) $300,000 in  convertible  debentures
and (ii) warrants to buy 3,000,000 shares of our common stock.

         This  prospectus  relates to the resale of the common stock  underlying
these convertible debentures and warrants.

         The investors are obligated to provide us with an aggregate of $300,000
as follows:

         o    $175,000 was disbursed to us on August 4, 2004;
         o    $50,000 has been retained for services  provided to our company by
              various professionals, which shall be disbursed upon effectiveness
              of this registration statement; and
         o    $75,000 will be released upon  effectiveness of this  registration
              statement.

         The debentures bear interest at 5 3/4%,  mature two years from the date
of  issuance,  and  are  convertible  into  our  common  stock,  at the  selling
stockholder's option. The convertible debentures are convertible into the number
of our shares of common stock equal to the  principal  amount of the  debentures
being  converted  multiplied  by 11,  less the product of the  conversion  price
multiplied by ten times the dollar amount of the debenture. The conversion price
for the convertible  debenture is the lesser of (i) $0.50 or (ii) eighty percent
of the of the average of the five lowest volume  weighted  average prices during
the twenty (20) trading  days prior to the  conversion.  If the volume  weighted
average price is below $0.10 on a conversion  date, we have the right to pre-pay
the amount of the  debenture  the holder  elects to  convert,  plus  accrued and
unpaid interest, at 125% of such amount; however, if we elect to pre-pay in this
situation,  the  debenture  holder  has the  right to  withdraw  the  notice  of
conversion.  Also,  if the volume  weighted  average price is below $0.10 at any
point during a month,  the holder is not obligated to convert any portion of the
debenture  during  that  month.  Accordingly,  there  is in fact no limit on the
number of shares into which the  debenture may be  converted.  In addition,  the
selling  stockholder is obligated to exercise the warrant  concurrently with the
submission  of a conversion  notice by the selling  stockholder.  The warrant is
exercisable  into 3,000,000 shares of common stock at an exercise price of $1.00
per share.

                                       46


         Golden Gate Investors has  contractually  committed to convert not less
than 5% of the original face value of the debenture  monthly beginning the month
after the effective date of the Registration Statement. Golden Gate Investors is
required to exercise  warrants  concurrently  with the  exercise of a conversion
notice  under the  debenture  and is  committed  to  exercise at least 5% of the
warrants per month after the effective date of the  Registration  Statement.  In
the event that Golden Gate  Investors  breaches the minimum  restriction  on the
debenture and warrant,  Golden Gate will not be entitled to collect  interest on
the debenture for that month. If Golden Gate submits a conversion notice and the
volume  weighted  average  price is less  then $.10 per  share,  then we will be
entitled to prepay the portion of the debenture that is being  converted at 125%
of such  amount.  If we elect to  prepay,  then  Golden  Gate may  withdraw  its
conversion notice.

         Golden Gate has further contractually agreed to restrict its ability to
convert the  debenture  or exercise  their  warrants  and receive  shares of our
common  stock  such  that  the  number  of  shares  held by the  Holder  and its
affiliates  after such  conversion  or exercise does not exceed 4.9% of the then
issued and outstanding shares of our common stock.

         In the event that the registration  statement is not declared effective
by the  required  deadline,  which is 150 days  from the date of the  Securities
Purchase Agreement, Golden Gate may demand repayment of the Debenture of 150% of
the face amount outstanding,  plus all accrued and unpaid interest,  in cash. If
the  repayment  is  accelerated,  we are also  obligated to issue to Golden Gate
50,000  shares of common  stock and $15,000 for each 30-day  period,  or portion
thereof,  during  which the face amount,  including  interest  thereon,  remains
unpaid.  If Golden  Gate  does not elect to  accelerate  the  debenture,  we are
required to  immediately  issue to Golden Gate 50,000 shares of common stock and
$15,000  for each  30-day  period,  or portion  thereof,  during  which the face
amount, including interest thereon, remains unpaid.

Conversion Calculation

         The  convertible  debentures  are  convertible  into the  number of our
shares of common stock equal to the  principal  amount of the  debentures  being
converted  multiplied by 11, less the product of the conversion price multiplied
by ten  times the  dollar  amount.  The  conversion  price  for the  convertible
debentures  is the  lesser of (i)  $0.50 or (ii)  eighty  percent  of the of the
average of the five lowest volume weighted average prices during the twenty (20)
trading  days prior to the  conversion.  For  example,  assuming  conversion  of
$300,000 of  debentures on November 18, 2004, a  conversion  price of $0.152 per
share, the number of shares issuable upon conversion would be:

($300,000 x 11) - ($.152 x (10 x $300,000))  = 2,844,000/$.152 = 18,710,526

         The following is an example of the amount of shares of our common stock
that are issuable,  upon  conversion of the principal  amount of our convertible
debentures,  based on market prices 25%, 50% and 75% below the market price,  as
of November 19, 2004 of $0.24.

                        
% Below                                      Number    
Outstanding   Price Per      With Discount   of Shares            % of
Market           Share         at 20%        Issuable             Stock
------           -----         ------        --------             -----

25%             $.18           $.144         19,916,667           21.30%
50%             $.12           $.096         31,375,000           29.90%
75%             $.06           $.048         65,750,000           47.19%

                                       47


7)       We entered  into a Securities  Purchase  Agreement  with an  accredited
investor on August 17, 2004 for the sale of $200,000 in convertible notes.

         The  investor is  obligated to provide us with an aggregate of $200,000
as follows:

         o    $100,000 was disbursed on August 17, 2004; and
         o    $100,000 will be disbursed  within five days of the  effectiveness
              of this prospectus.

         Accordingly,  we have  received  a total of  $100,000  pursuant  to the
Securities Purchase Agreement.

         The  convertible  notes bear interest at 10%, mature two years from the
date of issuance,  and are  convertible  into our common  stock,  at the selling
stockholders'  option,  at $0.10 per  share.  In the event that we enter into an
agreement  subsequent to execution of the Securities  Purchase Agreement to sell
common stock or a convertible  instrument  that converts into Common Stock prior
to  conversion of these  debentures  at a price less than a conversion  price of
$0.10,  then the conversion price of these debentures will reset to the lower of
$0.10 or the lower conversion  price equal to that in the subsequent  agreement.
Warrants are  exercisable at $0.12 into shares of our common stock of and expire
on August 17, 2007.  This  prospectus  relates to the resale of the common stock
underlying these convertible notes and warrants.

8)       On September 15, 2004 we entered into a Stock  Purchase  Agreement with
an individual  investor.  This investor purchased 1,000,000 shares of our common
stock, at $0.10 per share, for a total purchase price of $100,000. In connection
with this Stock Purchase  Agreement,  we issued the investor 1,000,000 warrants,
exercisable  at $0.13 per  share,  which  expire on  September  15,  2007.  This
prospectus   relates  to  the  resale  of  the  common  stock  underlying  these
convertible notes and warrants.

                 INDEMNIFICATION FOR SECURITIES ACT LIABILITIES

         Our By-laws,  as amended,  provide to the fullest  extent  permitted by
California  law, our directors or officers shall not be personally  liable to us
or our  shareholders  for damages  for breach of such  director's  or  officer's
fiduciary duty. The effect of this provision of our By-laws,  as amended,  is to
eliminate our right and our shareholders (through shareholders' derivative suits
on behalf of our company) to recover  damages  against a director or officer for
breach  of the  fiduciary  duty of  care as a  director  or  officer  (including
breaches resulting from negligent or grossly negligent  behavior),  except under
certain  situations  defined by  statute.  We believe  that the  indemnification
provisions  in our  By-laws,  as amended,  are  necessary  to attract and retain
qualified persons as directors and officers.

         Insofar as indemnification for liabilities arising under the Securities
Act of 1933 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.

                              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 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:

                                       48


         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 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  shall  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  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  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 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


                                       49


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 is contractually
restricted  from engaging in short sells.  In addition,  if a 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.

PENNY STOCK

         The  Securities  and Exchange  Commission  has adopted Rule 15g-9 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,  the
rules require:

         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 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 Commission 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.

                                       50


         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.


                              SELLING STOCKHOLDERS

         The table  below sets forth  information  concerning  the resale of the
shares of common  stock by the  selling  stockholders.  We will not  receive any
proceeds  from the resale of the common  stock by the selling  stockholders.  We
will receive proceeds from the exercise of the warrants. Assuming all the shares
registered  below  are sold by the  selling  stockholders,  none of the  selling
stockholders will continue to own any shares of our common stock.

         The  following  table  also sets  forth the name of each  person who is
offering the resale of shares of common stock by this prospectus,  the number of
shares of common stock  beneficially  owned by each person, the number of shares
of common  stock that may be sold in this  offering  and the number of shares of
common stock each person will own after the offering,  assuming they sell all of
the shares offered.



------------------- ----------------- ------------- ------------- ------------ -------------- ------------ -------------
                                          Total
                      Total Shares of   Percentage                                                           Percentage
                       Common Stock     of Common     Shares of                                 Beneficial   of Common
                       Issuable Upon      Stock,     Common Stock   Beneficial  Percentage of   Ownership   Stock Owned
                       Conversion of     Assuming     Included in   Ownership   Common Stock    After the      After
        Name        Debentures, Notes      Full       Prospectus    Before the  Owned Before    Offering     Offering
                      and/or Warrants    Conversion       (1)       Offering*   Offering        (4)           (4)
------------------- ----------------- ------------- ------------- ------------ -------------- ------------ -------------
                                                                                          
Golden Gate             21,710,526 (3)   27.78%         Up to       3,790,879        4.9%*           --            --
  Investors,                                           23,625,000
  Inc.(2)                                               shares of
                                                      common stock
------------------- ----------------- ------------- ------------- ------------ -------------- ------------ -------------
Bernadette Haag            200,000 (5)      **          Up to         400,000          **           --            --
                                                       400,000
                                                      shares of
                                                     common stock
------------------- ----------------- ------------- ------------- ------------ -------------- ------------ -------------
David Gough              4,400,000 (6)    5.72%        Up to        4,400,000       5.72%           --            --
                                                     4,400,000
                                                      shares of
                                                    common stock
------------------- ----------------- ------------- ------------- ------------ -------------- ------------ -------------
Roger Lents                500,000 (7)    2.16%         Up to       1,000,000       1.37%           --            --
                                                      1,000,000
                                                      shares of
                                                    common stock
------------------- ----------------- ------------- ------------- ------------ -------------- ------------ -------------
Stan Merdinger           2,000,000 (8)    2.72%       Up to         2,000,000       2.72%           --            --
                                                      2,000,000
                                                      shares of
                                                    common stock
------------------- ----------------- ------------- ------------- ------------ -------------- ------------ -------------


                                       51




------------------- ----------------- ------------- ------------- ------------ -------------- ------------ -------------
                                                                                          
Rayne Forecast           1,000,000 (10)   1.37%       Up to         1,000,000       1.37%           --            --
   Inc. (9)                                           1,000,000
                                                     shares of
                                                    common stock
------------------- ----------------- ------------- ------------- ------------ -------------- ------------ -------------
Kazi Management         18,333,334 (12)  20.18%         Up to      7,701,664        9.9% (13)       --           --
   VI, LLC (11)                                     18,333,334
                                                    shares of
                                                    common stock
------------------- ----------------- ------------- ------------- ------------ -------------- ------------ -------------
Gerald Hannahs           5,000,000 (14)   6.45%     Up to          5,000,000        6.45%           --            --
                                                    5,000,000
                                                    shares of
                                                    common stock
------------------- ----------------- ------------- ------------- ------------ -------------- ------------ -------------

* These columns represents the aggregate maximum number and percentage of shares
that the  selling  stockholders  can own at one time (and  therefore,  offer for
resale at any one time) due to their 4.9% limitation.

** Less than one percent.

***On September 30, 2004,  Kazi Management VI, LLC (KMVI) held 2,437,072  shares
and $500,000 in notes convertible into common stock at $0.06. Upon conversion of
the notes,  KMVI will receive  8,333,333 shares of common stock and a warrant to
purchase  one  share  of  common  stock  for  each  conversion  share  at  $0.06
exercisable  within  five  years.  KMVI does not have the right to  convert  any
portion of the  Note(s)  or  Warrant(s)  that would  cause KMVI to be deemed the
beneficial  owner of more than nine point nine percent (9.9%) of the outstanding
shares of Common Stock of the Company. Therefore, as of September 30, 2004, KMVI
was only in control of 6,936,788 shares.

         The number and percentage of shares beneficially owned is determined in
accordance  with Rule  13d-3 of the  Securities  Exchange  Act of 1934,  and the
information is not necessarily  indicative of beneficial ownership for any other
purpose.  Under such rule,  beneficial ownership includes any shares as to which
the selling stockholders has sole or shared voting power or investment power and
also any shares,  which the selling stockholders has the right to acquire within
60 days.  The  actual  number  of  shares  of  common  stock  issuable  upon the
conversion of the convertible  debentures is subject to adjustment depending on,
among other factors,  the future market price of the common stock,  and could be
materially less or more than the number estimated in the table.

(1)      Includes a good faith estimate of the shares  issuable upon  conversion
of the convertible  debentures and  convertible  notes and exercise of warrants,
based on current  market  prices.  Because the number of shares of common  stock
issuable upon conversion of the convertible debentures is dependent in part upon
the market price of the common stock prior to a conversion, the actual number of
shares of common stock that will be issued upon  conversion will fluctuate daily
and  cannot be  determined  at this  time.  Under  the terms of the  convertible
debentures,  if the  convertible  debentures  had  actually  been  converted  on
November 18, 2004, the conversion price would have been $.152. The actual number
of shares of common  stock  offered  in this  prospectus,  and  included  in the
registration  statement  of  which  this  prospectus  is a part,  includes  such
additional  number of shares of common  stock as may be issued or issuable  upon
conversion of the convertible debentures and exercise of the related warrants by
reason of any stock split, stock dividend or similar  transaction  involving the


                                       52


common stock,  in  accordance  with Rule 416 under the  Securities  Act of 1933.
However the selling  stockholders  have  contractually  agreed to restrict their
ability to convert their  convertible  debentures or exercise their warrants and
receive  shares of our  common  stock  such that the  number of shares of common
stock held by them in the aggregate and their  affiliates  after such conversion
or exercise  does not exceed 4.9% of the then issued and  outstanding  shares of
common stock as determined in accordance with Section 13(d) of the Exchange Act.
Accordingly, the number of shares of common stock set forth in the table for the
selling  stockholders  exceeds  the  number of shares of common  stock  that the
selling  stockholders  could own  beneficially  at any given time through  their
ownership of the convertible  debentures and the warrants.  In that regard,  the
beneficial ownership of the common stock by the selling stockholder set forth in
the table is not  determined in accordance  with Rule 13d-3 under the Securities
Exchange Act of 1934, as amended.

(2)      The selling  stockholder is an unaffiliated  third party. In accordance
with rule 13d-3 under the  Securities  Exchange Act of 1934,  Norman Lizt may be
deemed a control person of the shares owned by the selling stockholder.

(3)      Includes  20,625,000  shares of common  stock  underlying  our $300,000
convertible  debenture and 3,000,000  shares of common stock  underlying  common
stock purchase warrants issued to Golden Gate Investors, Inc.

(4)      Assumes that all securities registered will be sold.

(5)      Includes  200,000  shares  of  common  stock  underlying  common  stock
purchase warrants issued to Bernadette Haag.

(6)      Includes  2,200,000  shares of common  stock  underlying  our  $200,000
convertible note and 2,200,000  shares of common stock  underlying  common stock
purchase warrants issued to David Gough.

(7)      Includes  500,000  shares  of  common  stock  underlying  common  stock
purchase warrants issued to Roger Lents.

(8)      Includes  1,000,000  shares of common  stock  underlying  common  stock
purchase warrants issued to Stan Merdinger.

(9)      The selling  stockholder is an unaffiliated  third party. In accordance
with rule 13d-3 under the  Securities  Exchange  Act of 1934,  Todd Davis may be
deemed a control person of the shares owned by the selling stockholder.

(10)     Includes  500,000  shares  of  common  stock  underlying  common  stock
purchase warrants issued to Rayne Forecast, Inc.

(11)     The selling  stockholder is an unaffiliated  third party. In accordance
with rule 13d-3 under the  Securities  Exchange Act of 1934,  Zubair Kazi may be
deemed a control person of the shares owned by the selling stockholder.

(12)     Includes  9,166,667  shares of common  stock  underlying  our  $500,000
convertible note and 9,166,667  shares of common stock  underlying  common stock
purchase warrants issued to Kazi Management VI, LLC.

(13) Kazi  Management  VI,  LLC holds  2,437,072  shares and  $500,000  in notes
convertible into common stock at $0.06.  Upon full conversion of the notes, Kazi
Management  VI will  receive  8,333,333  shares of common stock and a warrant to
purchase  one  share  of  common  stock  for  each  conversion  share  at  $0.06
exercisable  within five years.  Kazi  Management  VI does not have the right to
convert any portion of the Notes or Warrants that would cause Kazi Management VI
to be deemed the beneficial owner of more than 9.9% of our outstanding shares of
Common  Stock.  Therefore,  Kazi  Management  VI is only in control of 7,701,664
shares at the time of the offering but will be in control of more shares,  up to
9.9% after the offering.
                                       53

(14)     Includes  5,000,000  shares of common  stock  underlying  common  stock
purchase warrants issued to Gerald Hannahs.

Terms of Convertible Debentures and Convertible Notes

         To obtain  funding  for our  ongoing  operations,  we entered  into the
following transactions involving convertible securities:

1)       On September 26, 2003 we entered into a Note Purchase Agreement with an
individual  investor.  This investor  purchased five convertible notes, each for
$100,000,  for a total purchase price of $500,000.  The  convertible  notes bear
interest at 10% per annum. These notes are convertible into shares of our common
stock at a price of $0.06. In connection with this Note Purchase Agreement,  the
investor will receive up to 9,166,667  warrants  exercisable  at $0.10 per share
and expiring on September 26, 2008, with the investor  receiving one warrant for
every share converted under the convertible  notes.  This prospectus  relates to
the resale of the common stock underlying these convertible notes and warrants.

2)       On July 11, 2004 we entered into a Securities  Purchase  Agreement with
an individual investor.  This investor purchased a convertible note for $20,000.
On August 31, 2004,  the holder  converted  this note into 200,000 shares of our
common stock. In connection with this Securities Purchase  Agreement,  we issued
the investor 200,000 warrants,  exercisable at $0.15 per share,  which expire on
July 11, 2007. This prospectus  relates to the resale of the common stock issued
upon  conversion  of the  convertible  note  and  the  shares  of  common  stock
underlying the warrants.

3)       On July 27, 2004 we entered into a Securities  Purchase  Agreement with
an individual investor.  This investor purchased a convertible note for $50,000.
On August 31, 2004,  the holder  converted  this note into 500,000 shares of our
common stock. In connection with this Securities Purchase  Agreement,  we issued
the investor 500,000 warrants,  exercisable at $0.15 per share,  which expire on
July 27, 2007. This prospectus  relates to the resale of the common stock issued
upon  conversion  of the  convertible  note  and  the  shares  of  common  stock
underlying the warrants.

4)       On July 29,  2004,  we entered  into an  Agreement  with  Langley  Park
Investments PLC, a London  investment  company to issue 14,000,000 shares of our
common  stock to Langley  Park  Investments  in return for  1,145,595  shares of
Langley.  Fifty  percent of Langley Park  Investments  shares issued to us under
this agreement are to be held in escrow for two years.  At the end of two years,
if the market price for our common stock at or greater than the initial  closing
price,  the escrow agent will  release the  remaining  Langley Park  Investments
shares to us. In the event  that the market  price for our common  stock is less
than the initial closing price the amount released will be adjusted.

         Langley Park  Investments'  initial  offering  price was 1(pound)  (One
Pound UK per share). Our shares are to be held by Langley Park Investments for a
period of at least two years.  Langley Park Investments' shares issued to us are
free trading. Langley Park Investment Trust Plc was admitted to the Full List of
The London Stock  Exchange on September 30, 2004 and dealings in Langley  shares
commenced on October 7, 2004.


                                       54


5)       We entered  into a Securities  Purchase  Agreement  with an  accredited
investor in August 2004 for the sale of (i) $300,000 in  convertible  debentures
and (ii) warrants to buy 3,000,000 shares of our common stock.

         This  prospectus  relates to the resale of the common stock  underlying
these convertible debentures and warrants.

         The investors are obligated to provide us with an aggregate of $300,000
as follows:

         o    $175,000 was disbursed to us on August 4, 2004;
         o    $50,000 has been retained for services  provided to our company by
              various professionals, which shall be disbursed upon effectiveness
              of this registration statement; and
         o    $75,000 will be released upon  effectiveness of this  registration
              statement.

         The debentures bear interest at 5 3/4%,  mature two years from the date
of  issuance,  and  are  convertible  into  our  common  stock,  at the  selling
stockholder's option. The convertible debentures are convertible into the number
of our shares of common stock equal to the  principal  amount of the  debentures
being  converted  multiplied  by 11,  less the product of the  conversion  price
multiplied by ten times the dollar amount of the debenture. The conversion price
for the convertible  debenture is the lesser of (i) $0.50 or (ii) eighty percent
of the of the average of the five lowest volume  weighted  average prices during
the twenty (20) trading  days prior to the  conversion.  If the volume  weighted
average price is below $0.10 on a conversion  date, we have the right to pre-pay
the amount of the  debenture  the holder  elects to  convert,  plus  accrued and
unpaid interest, at 125% of such amount; however, if we elect to pre-pay in this
situation,  the  debenture  holder  has the  right to  withdraw  the  notice  of
conversion.  Also,  if the volume  weighted  average price is below $0.10 at any
point during a month,  the holder is not obligated to convert any portion of the
debenture  during  that  month.  Accordingly,  there  is in fact no limit on the
number of shares into which the  debenture may be  converted.  In addition,  the
selling  stockholder is obligated to exercise the warrant  concurrently with the
submission  of a conversion  notice by the selling  stockholder.  The warrant is
exercisable  into 3,000,000 shares of common stock at an exercise price of $1.00
per share.

         Golden Gate Investors has  contractually  committed to convert not less
than 5% of the original face value of the debenture  monthly beginning the month
after the effective date of the Registration Statement. Golden Gate Investors is
required to exercise  warrants  concurrently  with the  exercise of a conversion
notice  under the  debenture  and is  committed  to  exercise at least 5% of the
warrants per month after the effective date of the  Registration  Statement.  In
the event that Golden Gate  Investors  breaches the minimum  restriction  on the
debenture and warrant,  Golden Gate will not be entitled to collect  interest on
the debenture for that month. If Golden Gate submits a conversion notice and the
volume  weighted  average  price is less  then $.10 per  share,  then we will be
entitled to prepay the portion of the debenture that is being  converted at 125%
of such  amount.  If we elect to  prepay,  then  Golden  Gate may  withdraw  its
conversion notice.

         Golden Gate has further contractually agreed to restrict its ability to
convert the  debenture  or exercise  their  warrants  and receive  shares of our
common  stock  such  that  the  number  of  shares  held by the  Holder  and its
affiliates  after such  conversion  or exercise does not exceed 4.9% of the then
issued and outstanding shares of our common stock.

                                       55


         In the event that the registration  statement is not declared effective
by the  required  deadline,  which is 150 days  from the date of the  Securities
Purchase Agreement, Golden Gate may demand repayment of the Debenture of 150% of
the face amount outstanding,  plus all accrued and unpaid interest,  in cash. If
the  repayment  is  accelerated,  we are also  obligated to issue to Golden Gate
50,000  shares of common  stock and $15,000 for each 30-day  period,  or portion
thereof,  during  which the face amount,  including  interest  thereon,  remains
unpaid.  If Golden  Gate  does not elect to  accelerate  the  debenture,  we are
required to  immediately  issue to Golden Gate 50,000 shares of common stock and
$15,000  for each  30-day  period,  or portion  thereof,  during  which the face
amount, including interest thereon, remains unpaid.

Conversion Calculation

         The  convertible  debentures  are  convertible  into the  number of our
shares of common stock equal to the  principal  amount of the  debentures  being
converted  multiplied by 11, less the product of the conversion price multiplied
by ten  times the  dollar  amount.  The  conversion  price  for the  convertible
debentures  is the  lesser of (i)  $0.50 or (ii)  eighty  percent  of the of the
average of the five lowest volume weighted average prices during the twenty (20)
trading  days prior to the  conversion.  For  example,  assuming  conversion  of
$300,000 of  debentures on November 18, 2004, a  conversion  price of $0.152 per
share, the number of shares issuable upon conversion would be:

($300,000 x 11) - ($.152 x (10 x $300,000))  = 2,844,000/$.152 = 18,710,526

         The following is an example of the amount of shares of our common stock
that are issuable,  upon  conversion of the principal  amount of our convertible
debentures,  based on market prices 25%, 50% and 75% below the market price,  as
of November 19, 2004 of $0.24.

                                       55


% Below                                         Number              
Outstanding   Price Per       With Discount    of Shares           % of
Market           Share          at 20%         Issuable            Stock
------           -----          ------         --------            -----
25%             $.18            $.144          19,916,667          21.30%
50%             $.12            $.096          31,375,000          29.90%
75%             $.06            $.048          65,730,000          47.19%

7)       We entered  into a Securities  Purchase  Agreement  with an  accredited
investor on August 17, 2004 for the sale of $200,000 in convertible notes.

         The  investor is  obligated to provide us with an aggregate of $200,000
as follows:

         o    $100,000 was disbursed on August 17, 2004; and

         o    $100,000 will be disbursed  within five days of the  effectiveness
              of this prospectus.

         Accordingly,  we have  received  a total of  $100,000  pursuant  to the
Securities Purchase Agreement.

                                       56


         The  convertible  notes bear interest at 10%, mature two years from the
date of issuance,  and are  convertible  into our common  stock,  at the selling
stockholders'  option,  at $0.10 per  share.  In the event that we enter into an
agreement  subsequent to execution of the Securities  Purchase Agreement to sell
common stock or a convertible  instrument  that converts into Common Stock prior
to  conversion of these  debentures  at a price less than a conversion  price of
$0.10,  then the conversion price of these debentures will reset to the lower of
$0.10 or the lower conversion  price equal to that in the subsequent  agreement.
Warrants are  exercisable at $0.12 into shares of our common stock of and expire
on August 17, 2007.  This  prospectus  relates to the resale of the common stock
underlying these convertible notes and warrants.

8)       On September 15, 2004 we entered into a Stock  Purchase  Agreement with
an individual  investor.  This investor purchased 1,000,000 shares of our common
stock, at $0.10 per share, for a total purchase price of $100,000. In connection
with this Stock Purchase  Agreement,  we issued the investor 1,000,000 warrants,
exercisable  at $0.13 per  share,  which  expire on  September  15,  2007.  This
prospectus   relates  to  the  resale  of  the  common  stock  underlying  these
convertible notes and warrants.

         A complete copy of the Securities  Purchase  Agreements,  Note Purchase
Agreements and Stock Purchase Agreement and related documents are filed with the
SEC as exhibits to our Form SB-2 relating to this prospectus.

                                  LEGAL MATTERS

         Sichenzia  Ross Friedman  Ference LLP, New York, New York will issue an
opinion with respect to the validity of the shares of common stock being offered
hereby.

                                     EXPERTS

         Kabani & Company,  Inc., Independent Registered Public Accounting Firm,
have audited,  as set forth in their report thereon appearing  elsewhere herein,
our  financial  statements  at June 30,  2004 and for the year then  ended  that
appear in the prospectus.  Heard, McElroy & Vestal, LLP, Independent  Registered
Public  Accounting  Firm,  have  audited,  as set forth in their report  thereon
appearing  elsewhere herein,  our financial  statements at June 30, 2003 and for
the year then ended that  appear in the  prospectus.  The  financial  statements
referred  to above  are  included  in this  prospectus  with  reliance  upon the
Independent   Registered  Public  Accounting  Firm's  opinions  based  on  their
expertise in accounting and auditing.

                              AVAILABLE INFORMATION

         We  have  filed  a  registration  statement  on  Form  SB-2  under  the
Securities Act of 1933, as amended, relating to the shares of common stock being
offered  by  this  prospectus,  and  reference  is  made  to  such  registration
statement.  This prospectus  constitutes the prospectus of Quintek Technologies,
Inc., filed as part of the registration  statement,  and it does not contain all
information in the registration statement, as certain portions have been omitted
in accordance  with the rules and  regulations  of the  Securities  and Exchange
Commission.

         We are  subject to the  informational  requirements  of the  Securities
Exchange Act of 1934 which  requires us to file reports,  proxy  statements  and
other  information  with the Securities and Exchange  Commission.  Such reports,
proxy  statements  and other  information  may be inspected at public  reference
facilities of the SEC 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 SEC at Judiciary Plaza, 450 Fifth Street N.W., Washington,  D.C. 20549 at
prescribed rates. Because we file documents electronically with the SEC, you may
also  obtain  this  information  by  visiting  the  SEC's  Internet  website  at
http://www.sec.gov.
                                       57



                          INDEX TO FINANCIAL STATEMENTS

                           QUINTEK TECHNOLOGIES, INC.

                              FINANCIAL STATEMENTS


For the Years Ended June 30, 2004 and June 30, 2003

Reports of Independent Registered Public Accounting Firms        F-1 to F-2
Consolidated Balance Sheet                                       F-3 to F-6
Consolidated Statements of Operations                            F-7
Consolidated Statement of Stockholders' (Deficit)                F-8
Consolidated Statement of Cash Flows                             F-9 to F-10
Notes to Financial Statements                                    F-11 to F-28



For the Quarters Ended September 30, 2004 and September 30, 2003

Consolidated Balance Sheet (Unaudited)                           F-29
Consolidated Statements of Operations (Unaudited)                F-30
Consolidated Statement of Cash Flows (Unaudited)                 F-31
Notes to Unaudited Financial Statements                          F-32 to F-48



                           QUINTEK TECHNOLOGIES, INC.
                              FINANCIAL STATEMENTS
                                  JUNE 30, 2004
















             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



To the Stockholders and Board of Directors
Quintek Technologies, Inc

We have audited the accompanying balance sheet of Quintek  Technologies,  Inc (a
California  Corporation)  as of June 30,  2004  and the  related  statements  of
operations,  stockholders' deficit and cash flows for the year then ended. These
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

We conducted our audit of these  statements in accordance  with the standards of
the Public Company Accounting  Oversight Board (United States).  Those standards
require that we plan and perform the audit to obtain reasonable  assurance about
whether the financial  statements  are free of material  misstatement.  An audit
includes  examining,  on a test  basis,  evidence  supporting  the  amounts  and
disclosures in the financial  statements.  An audit also includes  assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation.  We believe that our
audit provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of Quintek Technologies, Inc as of
June 30, 2004 and the results of its  operations and its cash flows for the year
ended June 30, 2004 in conformity with accounting  principles generally accepted
in the United States of America.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in Note 21 to the
combined financial  statements,  the Company's  significant operating losses and
insufficient  capital raise substantial doubt about its ability to continue as a
going concern.  Management's plans regarding those matters also are described in
Note 21. The combined  financial  statements do not include any adjustments that
might result from the outcome of this uncertainty.




/s/ KABANI & COMPANY, INC.
----------------------------------
Fountain Valley, California
September 21, 2004

                                      F-1



To the Board of Directors and Stockholders
Quintek Technologies, Inc.
Camarillo, California

                          Independent Auditor's Report
                          ----------------------------


We have audited the accompanying balance sheet of Quintek Technologies, Inc., as
of June 30,  2003,  and the  related  statements  of  operations,  stockholders'
(deficit),  and cash flows for the year then ended.  These financial  statements
are the  responsibility of the Company's  management.  Our  responsibility is to
express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards  generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audit  provides  a
reasonable basis for our opinion.

In our opinion,  based on our audit, the 2003 financial  statements  referred to
above  present  fairly,  in all material  respects,  the  financial  position of
Quintek  Technologies,  Inc.,  as of  June  30,  2003,  and the  results  of its
operations and cash flows for the year then ended, in conformity with accounting
principles generally accepted in the United States of America.

The  accompanying  financial  statements  have been prepared in conformity  with
accounting principles generally accepted in the United States of America,  which
contemplate continuation of the Company as a going concern; however, the Company
has experienced  losses from  operations and substantial  doubt exists as to its
ability to continue  as a going  concern.  Continuation  is  dependent  upon the
success of future operations.  Management's plans in regard to those matters are
described in Note 2. The  financial  statements  do not include any  adjustments
that might result from the outcome of this uncertainty.

/s/ HEARD, McELROY & VESTAL, LLP
Shreveport, LA
September 18, 2003

                                      F-2



                           QUINTEK TECHNOLOGIES, INC.
                                  BALANCE SHEET
                                  JUNE 30, 2004


                                     ASSETS
                                     ------

                 CURRENT ASSETS:

      Cash & cash equivalents                                       $ 15,600
      Accounts receivable (net of allowance for doubtful accounts
      $15,179)                                                        28,736
      Prepaid expenses                                                 5,264
                                                                    --------
            Total current assets                                      49,600

PROPERTY AND EQUIPMENT, net                                           73,419

OTHER ASSETS:
      Deposits                                                         8,416
      Intangible assets, net                                          14,951
      Other assets                                                       889
                                                                    --------

                                                                    $147,275
                                                                    ========



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

                                      F-3






                      LIABILITIES AND STOCKHOLDERS' DEFICIT
                      -------------------------------------

                 CURRENT LIABILITIES:

                                                                  
      Accounts payable & accrued expenses                            $    438,826
      Factoring payables                                                   43,230
      Payroll and payroll taxes payable                                   187,138
      Payroll taxes assumed in merger                                      96,661
      Current portion of long-term debt                                    47,504
      Loans payable-stockholders                                          244,056
      Convertible bonds                                                    62,495
      Convertible notes                                                   500,000
      Deferred revenue                                                     87,040
      Liabilities in process of conversion to stock                       470,629
                                                                     ------------
            Total current liabilities                                   2,177,580

      Long term debt , net of current portion                              63,379

STOCKHOLDERS' DEFICIT
      Common stock, .001 par value; authorized shares 50,000,000
        issued and outstanding  shares 48,749,994                         487,500
      Additional paid in capital                                       20,475,680
      Shares to be issued-Series A Preferred stock, 250,000 shares         40,000
      Unamortized consulting fees                                         (35,798)
      Accumulated deficit                                             (23,061,065)
                                                                     ------------
            Total stockholders' deficit                                (2,093,683)


TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                          $    147,275
                                                                     ============




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

                                      F-4


                           QUINTEK TECHNOLOGIES, INC.

                                  BALANCE SHEET

                                  JUNE 30, 2003


                      A S S E T S                        2003
                      -----------                      --------

Current assets:
   Cash                                                   21,162
   Accounts receivable (net of allowance for bad
     debts of $26,498 and $20,498)                        73,118
   Inventory                                               4,371
   Other                                                   8,617
                                                        --------
       Total current assets                              107,268

Property and equipment, at cost:

   Equipment                                             102,881
   Computer and office equipment                          93,297
   Furniture and fixtures                                 33,518
                                                        --------
                                                         229,696
   Less-accumulated depreciation                        (206,687)
                                                        --------
       Net fixed assets                                   23,009

Other assets:
   Deposits                                                2,395
   Intangible assets (net of accumulated amortization
     of $87,100 and $53,082)                              48,973
   Investments                                            28,762
   Employee receivables, net                               3,599
                                                        --------
       Total other assets                                 83,729
                                                        --------

Total assets                                             214,006
                                                        =========

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




                                      F-5


   LIABILITIES AND STOCKHOLDERS' (DEFICIT)              2003
   ---------------------------------------           -----------

Current liabilities:
   Accounts payable                                      200,315
   Factoring payable                                     146,890
   Payroll and payroll taxes payable                     136,115
   Payroll taxes assumed in merger                       123,272
   Accrued expenses                                      116,609
   Current portion of long-term debt                      12,330
   Notes payable-stockholders                             32,300
   Other liabilities                                      29,135
   Convertible bonds                                     151,695
   Unearned revenue                                       41,034
   Liabilities in process of conversion to stock         468,669
                                                     -----------
       Total current liabilities                       1,458,364

Long-term debt, net of current portion                    24,659


Stockholders' (deficit):
   Common stock-$0.01 par value, 50,000,000 shares
     authorized, 46,762,008 and 40,162,008 issued
     and outstanding                                     467,620
   Additional paid-in capital                         20,326,780
   Retained (deficit)                                (22,062,534)
                                                     -----------

                                                      (1,268,134)
   Less-subscriptions receivable                            (883)
--------------------------------------------------   -----------
       Total stockholders' (deficit)                  (1,269,017)
                                                     -----------

Total liabilities and stockholders' (deficit)            214,006
                                                     ===========


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


                                      F-6





                           QUINTEK TECHNOLOGIES, INC.
                            STATEMENTS OF OPERATIONS
                   FOR THE YEARS ENDED JUNE 30, 2004 AND 2003

                                                            2004             2003
                                                        ------------    ------------

                                                                  
Net revenue                                             $    298,653    $    388,888

Cost of revenue                                              184,964         261,050
                                                        ------------    ------------

Gross profit                                                 113,689         127,838

Operating expenses
        Selling, general and administrative                  960,209         601,090

        Inventory write off                                   35,259            --

        Impairment - investment                               28,778            --
        Stock based compensation for services                 59,000         221,183
                                                        ------------    ------------
Total Operating Expenses                                   1,083,246         822,273

                                                        ------------    ------------
Loss from Operations                                        (969,557)       (694,435)

Non-operating income (expense):
        Gain on investments                                       16          19,792
        Other income                                             157          17,500

        Interest income                                       11,136            --
        Interest expense                                     (39,483)        (43,910)
                                                        ------------    ------------
Total non-operating income (expense)                         (28,174)         (6,618)

                                                        ------------    ------------
Loss before provision for income taxes                      (997,731)       (701,053)


Provision for income taxes                                       800            --

                                                        ------------    ------------
Net loss                                                $   (998,531)   $   (701,053)
                                                        ============    ============

Basic and diluted net loss per share                    $      (0.02)   $      (0.01)
                                                        ============    ============

Basic and diluted weighted average shares outstanding     48,164,549      46,762,008
                                                        ============    ============


   The accompanying notes are an integral part of these financial statements.
                                      F-7







                                                     QUINTEK TECHNOLOGIES, INC.
                                                 STATEMENTS OF STOCKHOLDERS' DEFICIT
                                             FOR THE YEARS ENDED JUNE 30, 2004 AND 2003
                          Common stock
                    ---------------------------                                      Un-                            Total
                                                    Additional     Shares         amortized        Accum-           stock-
                                                     paid in       to be          consulting       ulated          holder's
                      Shares         Amount          capital       issued            fees          deficit          deficit
                    ------------   ------------   ------------   ------------   ------------    ------------    ------------
                                                                                           
Balance at June       40,162,008   $    401,620   $ 19,997,017   $       --     $       --      $(21,361,481)   $   (962,844)
30, 2002

Stock issuances        6,600,000         66,000        266,383           --             --              --           332,383


Warrant issuances           --             --           20,691           --             --              --            20,691

Allowance on
subscription
receivable                  --             --           42,689           --             --              --            42,689

Net loss for the
year ended June
30, 2003                    --             --             --             --             --          (701,053)       (701,053)
                    ------------   ------------   ------------   ------------   ------------    ------------    ------------

Balance at June
30, 2003              46,762,008        467,620     20,326,780           --             --       (22,062,534)     (1,268,134)

Issuance of
shares for
services                 200,000          2,000         13,000           --             --              --            15,000

Issuance of
shares for
conversion of
bond and interest      1,773,695         17,737         88,685           --             --              --           106,422

Issuance of
shares for debt
settlement                14,291            143          1,643           --             --              --             1,786

250,000 shares of
Pref. stock to be
issued for
compensation                --             --             --           40,000           --              --            40,000

Common stock
options granted             --             --            4,000           --             --              --             4,000

Issuance of stock
warrants                    --             --           41,572           --          (35,798)           --             5,774

Net loss for the
year ended June
30, 2004                    --             --             --             --             --          (998,531)       (998,531)
                    ------------   ------------   ------------   ------------   ------------    ------------    ------------
Balance at June
30, 2004              48,749,994   $    487,500   $ 20,475,680   $     40,000   $    (35,798)   $(23,061,065)   $ (2,093,683)
                    ============   ============   ============   ============   ============    ============    ============

   The accompanying notes are an integral part of these financial statements.
                                      F-8




                           QUINTEK TECHNOLOGIES, INC.
                            STATEMENTS OF CASH FLOWS
                   FOR THE YEARS ENDED JUNE 30, 2004 AND 2003

                                                                                    2004           2003
                                                                                 -----------     ----------
      CASH FLOWS FROM OPERATING ACTIVITIES:
                                                                                          
              Net loss                                                             $(998,531)   $(701,053)
              Adjustments to reconcile net loss to net cash
                 used in operating activities:
                   Depreciation and amortization                                      50,730       46,195

                   Impairment of investment                                           28,778         --

                   Inventory write off                                                35,259         --

                   Issuance of stock for services                                     15,000      221,183

                   Issuance of stock issued for interest payment                      17,222         --

                   Shares to be issued for compensation                               40,000         --

                   Issuance of warrant for service                                     5,774         --
                   Stock options
                   granted                                                             4,000

                   Subscription receivable forgiven for services                        --         42,689
                   (Increase) decrease in current assets:
                          Accounts receivable                                         44,382      (45,906)

                          Inventory                                                  (30,888)      53,055

                          Other assets                                                 3,593       (4,279)

                          Prepaid Expenses                                             3,353         --

                          Deposits                                                    (6,021)       2,599

                          Investments                                                    (16)     (19,792)
                   Increase (decrease) in current liabilities:
                          Accounts payable and accrued expenses                      119,040       82,135
                          Payroll and payroll taxes payable                           51,023       80,806

                          Payroll taxes assumed in merger                            (26,611)        --
                          Deferred revenue                                            46,006       13,148

                          Liabilities in process of conversion to stock                1,960         --
                                                                                   ---------    ---------
              Total Adjustments                                                      402,584      471,833
                                                                                   ---------    ---------
                           Net cash used in operating activities                    (595,947)    (229,220)
                                                                                   ---------    ---------
(continued)

                                      F-9





      CASH FLOWS FROM INVESTING ACTIVITIES

                                                                                             
                   Payments for property & equipment                                    --         (5,803)

                   Proceeds from sale of investment                                     --         19,792

                   Decrease in employee receivables                                     --         (1,199)
                                                                                   ---------    ---------
                           Net cash provided by investing activities                    --           12,790
                                                                                   ---------    ---------

      CASH FLOWS FROM FINANCING ACTIVITIES:

                   Subscriptions receivable                                             --         12,200

                   Payments on factoring payables                                   (131,885)        --
                   Proceeds from factor                                               28,225      126,890
                   Proceeds (payment) on loans from stockholders                     211,756       (4,100)

                   Payments on notes payable                                         (17,711)        --

                   Proceeds from convertible notes                                   500,000         --

                   Proceeds from issuance of common stock                               --        100,000
                                                                                   ---------    ---------
                           Net cash provided by  financing activities                590,385      234,990
                                                                                   ---------    ---------

                 NET INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS                   18,560       (5,562)


                 CASH & CASH EQUIVALENTS, BEGINNING BALANCE                           21,162        2,602

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

                 CASH & CASH EQUIVALENTS, ENDING BALANCE                           $  15,600    $  21,162
                                                                                   =========    =========



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

                                      F-10


                           QUINTEK TECHNOLOGIES, INC.
                          NOTES TO FINANCIAL STATEMENTS

1. DESCRIPTION OF BUSINESS

The  Company  was  originally  incorporated  under  the  laws  of the  State  of
California on April 16, 1993, as Quintek Electronics,  Inc. On January 14, 1999,
the Company  merged with  Pacific  Diagnostic  Technologies,  Inc. in a business
combination accounted for as a purchase. The acquisition took place under a plan
of reorganization.  Quintek Electronics,  Inc. ("QEI") became public when it was
acquired by Pacific  Diagnostic  Technologies,  Inc.  ("PDX")  through a reverse
merger and Chapter 11 Plan of Reorganization.  Under the plan, all assets of QEI
were sold to PDX, all PDX management  resigned once the Plan was confirmed,  and
QEI's  management and operating  plan were adopted by the new operating  entity.
Shortly after the  confirmation of the plan, the name of the reorganized  debtor
was  changed to Quintek  Technologies,  Inc.  ("QTI").  QTI  assumed the assets,
liabilities, technology and public position of both QEI and PDX.

On February 24, 2000, the Company  acquired all of the outstanding  common stock
of Juniper Acquisition  Corporation  ("Juniper").  For accounting purposes,  the
acquisition was treated as a  capitalization  of the Company with the Company as
the acquirer (reverse acquisition).

The  Company  was   established   for  the   primary   purpose  of   developing,
manufacturing,   and   distributing   the  4300  Aperture  Card  Imaging  System
technologies,  used for  recording  digital  images on aperture card media ("the
4300 system").

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES & REALIZATION OF ASETS

 Use of estimates

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

Cash and cash equivalents

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

Accounts Receivable

The  Company  maintains   reserves  for  potential  credit  losses  on  accounts
receivable.  Management  reviews  the  composition  of accounts  receivable  and
analyzes  historical  bad  debts,  customer   concentrations,   customer  credit
worthiness,  current economic trends and changes in customer payment patterns to
evaluate the adequacy of these  reserves.  Reserves are recorded  primarily on a
specific  identification basis. Allowance for doubtful debts amounted to $15,179
as at June 30, 2004.

                                      F-11


Inventories

Inventories  are  valued at the  lower of cost  (determined  on FIFO,  first-in,
first-out) or market.  The Management  compares the cost of inventories with the
market value and  allowance is made for writing  down the  inventories  to there
market value, if lower.

Equity Method of Accounting for Investments

Investments  in  companies in which the Company has a 20% to 50% interest or has
significant  influence over the operating and financial policies of the investee
are  carried  at  cost,  adjusted  for  the  Company's  proportionate  share  of
undistributed earnings or losses.

Property & Equipment

Property and  equipment are stated at cost.  Expenditures  for  maintenance  and
repairs are charged to earnings as incurred; additions, renewals and betterments
are capitalized.  When property and equipment are retired or otherwise  disposed
of,  the  related  cost  and  accumulated  depreciation  are  removed  from  the
respective   accounts,   and  any  gain  or  loss  is  included  in  operations.
Depreciation of property and equipment is provided using the straight-line  over
the estimated useful lives (3-7 years) of the assets.

Intangible Assets

Intangible assets consist of patents and purchased proprietary processes and are
being amortized using straight-line  method over their remaining useful lives of
4 years. The Company evaluates intangible assets for impairment,  at least on an
annual basis and whenever events or changes in  circumstances  indicate that the
carrying  value may not be  recoverable  from its  estimated  future cash flows.
Recoverability  of intangible  assets,  other long-lived assets and, goodwill is
measured by comparing their net book value to the related projected undiscounted
cash flows from these  assets,  considering a number of factors  including  past
operating  results,  budgets,  economic  projections,  market trends and product
development  cycles.  If the net book  value of the asset  exceeds  the  related
undiscounted cash flows, the asset is considered impaired,  and a second test is
performed to measure the amount of  impairment  loss.  Potential  impairment  of
goodwill after July 1, 2002 is being  evaluated in accordance with SFAS No. 142.
The SFAS No.  142 is  applicable  to the  financial  statements  of the  Company
beginning July 1, 2002.

Long-lived assets

Effective January 1, 2002, the Company adopted Statement of Financial Accounting
Standards  No. 144,  "Accounting  for the  Impairment  or Disposal of Long-Lived
Assets" ("SFAS 144"), which addresses financial accounting and reporting for the
impairment  or  disposal  of  long-lived  assets and  supersedes  SFAS No.  121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of," and the accounting and reporting  provisions of APB Opinion No.
30,  "Reporting  the  Results of  Operations  for a  Disposal  of a Segment of a
Business." The Company  periodically  evaluates the carrying value of long-lived
assets to be held and used in accordance with SFAS 144. SFAS 144 requires

                                      F-12


impairment  losses  operations when indicators of impairment are present and the
undiscounted  cash flows estimated to be generated by those assets are less than
the assets' carrying  amounts.  In that event, a loss is recognized based on the
amount  by which  the  carrying  amount  exceeds  the fair  market  value of the
long-lived assets.  Loss on long-lived assets to be disposed of is determined in
a similar  manner,  except that fair  market  values are reduced for the cost of
disposal.

Accounts payable & accrued expenses

Accounts payable and accrued expenses consist of the following:

            Accounts payable                            $  203,612
            Accrued expenses                               235,214
                                                        -----------
                                                        $  438,826


Software development costs

The Company has adopted Statement of Position 98-1 ("SOP 98-1")  "Accounting for
the Costs of Computer  Software  Developed or Obtained for Internal Use", as its
accounting policy for internally  developed  computer software costs.  Under SOP
98-1, computer software costs incurred in the preliminary  development stage are
expensed as incurred.  Computer  software costs incurred  during the application
development  stage are capitalized  and amortized over the software's  estimated
useful life.

The Company makes on-going  evaluations of the recoverability of its capitalized
software by comparing the amount  capitalized  for each product to the estimated
net  realizable  value of the product.  If such  evaluations  indicate  that the
unamortized  software  development  costs exceed the net realizable  value,  the
Company writes off the amount which the unamortized  software  development costs
exceed net realizable value.

Advertising

The Company expenses advertising costs as incurred. Advertising expense was $792
and $236 for the years ended June 30, 2004 and 2003, respectively.

Research and Development

Expenditures  for  software  development  costs and  research  are  expensed  as
incurred.  The amounts  charged to operations  for the years ended June 30, 2004
and 2003 were $5,026 and $58,000, respectively.

Income taxes

Deferred taxes are provided for on a liability method for temporary  differences
between the  financial  reporting and tax basis of assets and  liabilities  that
will result in taxable or deductible amounts in the future.  Deferred tax assets
and liabilities are adjusted for the effects of changes in tax laws and rates on

                                      F-13


the date of enactment.  Deferred tax assets are reduced by a valuation allowance
when, in the opinion of management, it is more likely than not that some portion
or all of the deferred tax assets will be realized.  For the year ended June 30,
2004, such differences were insignificant.

Stock-based compensation

SFAS No. 123 prescribes  accounting and reporting  standards for all stock-based
compensation plans, including employee stock options, restricted stock, employee
stock  purchase  plans and stock  appreciation  rights.  SFAS No.  123  requires
compensation  expense to be recorded (i) using the new fair value method or (ii)
using the existing  accounting rules  prescribed by Accounting  Principles Board
Opinion No. 25,  "Accounting for stock issued to employees" (APB 25) and related
interpretations  with  proforma  disclosure  of what net income and earnings per
share would have been had the Company  adopted  the new fair value  method.  The
Company  has chosen to account for  stock-based  compensation  using  Accounting
Principles Board Opinion No. 25,  "Accounting for Stock Issued to Employees" and
has  adopted  the  disclosure   only   provisions  of  SFAS  123.   Accordingly,
compensation  cost for stock  options is measured as the excess,  if any, of the
quoted  market  price of the  Company's  stock at the date of the grant over the
amount an employee is required to pay for the stock.

The  Company's  board  of  directors  authorized  a stock  award  and  long-term
incentive  plan which  includes  stock  appreciation  rights and  certain  stock
incentive awards. The plan was approved by the shareholders as of June 30, 2004.

Fair value of financial instruments

Statement of financial accounting standard No. 107, Disclosures about fair value
of financial  instruments,  requires that the Company  disclose  estimated  fair
values of financial instruments. The carrying amounts reported in the statements
of financial position for current assets and current  liabilities  qualifying as
financial instruments are a reasonable estimate of fair value.

Basic and diluted net loss per share

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

                                      F-14


Revenue Recognition

Revenue is  recognized  when  earned.  The  Company  recognizes  its  revenue in
accordance with the Securities and Exchange Commissions ("SEC") Staff Accounting
Bulletin No. 104, "Revenue Recognition in Financial  Statements" ("SAB 104") and
The American  Institute of Certified Public Accountants  ("AICPA")  Statement of
Position ("SOP") 97-2, "Software Revenue  Recognition," as amended as amended by
SOP 98-4 and SOP 98-9.

Issuance of shares for service


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

Derivative Instruments

In June 1998,  the  Financial  Accounting  Standards  Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities." SFAS No. 133, as
amended by SFAS No. 137, is effective for fiscal years  beginning after June 15,
2000.  SFAS No. 133 requires the Company to recognize all  derivatives as either
assets or liabilities  and measure those  instruments at fair value.  It further
provides  criteria for  derivative  instruments  to be designated as fair value,
cash flow and foreign  currency  hedges and  establishes  respective  accounting
standards for reporting changes in the fair value of the derivative instruments.
After  adoption,  the Company is required to adjust hedging  instruments to fair
value in the  balance  sheet and  recognize  the  offsetting  gains or losses as
adjustments  to be  reported  in net income or other  comprehensive  income,  as
appropriate.  The Company has complied  with the  requirements  of SFAS 133, the
effect of which was not material to the Company's  financial position or results
of operations as the Company does not participates in such activities.

Reporting segments

Statement of financial  accounting standards No. 131, Disclosures about segments
of an  enterprise  and related  information  (SFAS No.  131),  which  superseded
statement of financial  accounting  standards  No. 14,  Financial  reporting for
segments of a business enterprise, establishes standards for the way that public
enterprises  report  information  about operating  segments in annual  financial
statements  and  requires  reporting  of selected  information  about  operating
segments  in interim  financial  statements  regarding  products  and  services,
geographic areas and major customers. SFAS No. 131 defines operating segments as
components  of an  enterprise  about which  separate  financial  information  is
available that is evaluated  regularly by the chief operating  decision maker in
deciding how to allocate  resources  and in assessing  performances.  Currently,
SFAS 131 has no effect on the  Company's  consolidated  financial  statements as
substantially  all of the  Company's  operations  are  conducted in one industry
segment.

                                      F-15


Reclassifications

Certain  comparative  amounts have been reclassified to conform with the current
year's presentation.

Recent Pronouncements

In  December  2002,  the FASB issued  SFAS No. 148  "Accounting  for Stock Based
Compensation-Transition  and  Disclosure".  SFAS No.  148 amends  SFAS No.  123,
"Accounting for Stock Based  Compensation",  to provide  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 Statement 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.  The Statement is effective for the Companies' interim reporting period
ending January 31, 2003.

In  compliance  with FAS No. 148,  the Company has elected to continue to follow
the  intrinsic  value  method  in  accounting  for  its   stock-based   employee
compensation  plan  as  defined  by APB  No.  25 and  has  made  the  applicable
disclosures below.

Had the Company  determined  employee stock based  compensation  cost based on a
fair value  model at the grant date for its stock  options  under SFAS 123,  the
Company's  net  earnings  per share  would have been  adjusted  to the pro forma
amounts for the year ended June 30, 2004 and 2003,  as follows ($ in  thousands,
except per share amounts). :

                                                      Year ended June 30
                                                     2004           2003
                                                  ------------   ----------
           Net loss - as reported               $       (999)     (701)

            Stock-Based employee compensation
              expense included in reported net
   income, net of tax                                    --        --

 Total stock-based employee
   compensation expense determined
   under fair-value-based method for all
   rewards, net of tax                                     (8)     --
                                                 ------------   ----------

 Pro forma net loss                              $     (1,006)     (701)
                                                 ============   ==========
Earnings (loss) per share:

 Basic, as reported                              $   (0.02)      $(0.01)
 Diluted, as reported                            $   (0.02)      $(0.01)
 Basic, pro forma                                $   (0.02)      $(0.01)
 Diluted, pro forma                              $   (0.02)      $(0.01)


On May 15 2003, the FASB issued FASB Statement No. 150 ("SFAS 150"),  Accounting
for Certain Financial  Instruments with  Characteristics of both Liabilities and
Equity. SFAS 150 changes the accounting for certain financial instruments that,

                                      F-16


under previous guidance, could be classified as equity or "mezzanine" equity, by
now requiring  those  instruments to be classified as liabilities  (or assets in
some  circumstances) in the statement of financial position.  Further,  SFAS 150
requires  disclosure  regarding the terms of those  instruments  and  settlement
alternatives.  SFAS 150  affects an  entity's  classification  of the  following
freestanding  instruments:  a) Mandatorily  redeemable  instruments b) Financial
instruments  to  repurchase  an entity's  own equity  instruments  c)  Financial
instruments embodying obligations that the issuer must or could choose to settle
by issuing a variable  number of its shares or other  equity  instruments  based
solely on (i) a fixed monetary amount known at inception or (ii) something other
than  changes  in its own  equity  instruments  d) SFAS 150  does  not  apply to
features  embedded in a financial  instrument  that is not a  derivative  in its
entirety.  The guidance in SFAS 150 is  generally  effective  for all  financial
instruments  entered  into or  modified  after May 31,  2003,  and is  otherwise
effective at the beginning of the first interim period  beginning after June 15,
2003. For private companies,  mandatorily  redeemable financial  instruments are
subject to the  provisions  of SFAS 150 for the fiscal  period  beginning  after
December 15, 2003. The adoption of SFAS No. 150 does not have a material  impact
on the Company's financial position or results of operations or cash flows.

In December  2003,  the  Financial  Accounting  Standards  Board (FASB) issued a
revised  Interpretation  No. 46,  "Consolidation of Variable Interest  Entities"
(FIN 46R). FIN 46R addresses  consolidation by business  enterprises of variable
interest  entities and significantly  changes the  consolidation  application of
consolidation   policies  to  variable  interest  entities  and,  thus  improves
comparability  between  enterprises  engaged  in similar  activities  when those
activities are conducted  through variable interest  entities.  The Company does
not hold any variable interest entities.

3.       INVENTORIES

Inventory  consists of parts and supplies.  The Company recorded an allowance of
obsolesce amounting $ 35,259 as on June 30, 2004. As a result, 100% of inventory
totaling $332,904 was reserved for obsolescence.

4. PROPERTY AND EQUIPMENT

Property and equipment at June 30, 2004, consists of the following:

                Computer and office equipment   $ 111,752
                Machinery and equipment            48,670
                Other depreciable assets          102,880
                Furniture and fixture              33,518
                                                ---------
                                                  296,820
                Accumulated depreciation         (223,401)
                                                ---------
                                                $  73,419


5. INTANGIBLE ASSETS

Net intangible assets at June 30, 2004 were as follows:

                 Patents and proprietary processes   $ 136,067
                 Accumulated amortization              121,116
                                                     ---------
                                                     $  14,951

Amortization  expense for the Company's  current  amortizable  intangible assets
over the next fiscal year is estimated to be:

                         2005                        $  14,951

                                      F-17


6. IMPAIREMENT OF INVESTMENT

The  investments  held by the Company  consisted of a 49% ownership  interest in
Qtek Aperture Card AB, a Swedish  corporation  and a 8.54%  ownership in PanaMed
Corp.  The  investment  in Qtek was  accounted  for using the  equity  method of
accounting  due to the  significant  influence  that  the  Company  had over its
investee.  The PanaMed  investment was accounted for using the equity method for
the year ending June 30, 2002; The PanaMed  investment is accounted for at cost,
which is zero.  The total value of the Qtek Aperture AB  investment  amounted to
$28,778 at June 30, 2004. On June 30, 2004, the Company evaluated its investment
according to FASB 144 and recognized an impairment  loss equal to the book value
of these intangible assets amounting $28,778.

7. EMPLOYEE RECEIVABLES

             Notes receivable from officers, unsecured,
             due on June 30, 2019, interest at 4%              $ 377,649

             Interest receivable in connection with
             above notes receivable                                15,559
                                                               ----------

393,208
             Valuation allowance                                (393,208)
                                                                ---------
                                                                    --
                                                                =========

8. FACTORING PAYABLE

The  Company has  entered  into an  agreement  with a  factoring  company  ("the
Factor") to factor  purchase  orders with recourse.  The Factor funds 97% or 90%
based upon the status of the purchase  order.  The Factor has agreed to purchase
up to $4,800,000 of qualified  purchase  orders over the term of the  agreement;
however,  the Factor does not have to purchase  more than  $200,000 in any given
month. The agreement term is from June 2, 2003 to June 2, 2005. The Company will
pay a late fee of 3% for  payments  not made within 30 days and 5% for those not
made in 60 days.  At the  option of the  Factor,  the late fees may be paid with
Company stock. If paid by Company stock,  the stock bid price will be discounted
50% in computing the shares to be issued in payment of the late fee.


The Company has agreed to issue the Factor  1,500,000  warrants  purchasing  the
Company's stock as a fee for the factoring agreement. The stock issued under the
warrants can be purchased at the average  closing price of the  Company's  stock
for the 90 days prior to the factoring agreement.

The Company has also issued the Factor bonus  warrants.  The Factor will receive
two (2) bonus warrants for each dollar of purchase orders  purchased.  The bonus
warrants  will be  exercisable  at the average  closing  price of the  Company's
common  stock for the 90 days  prior to the  purchase  order  transactions  they
represent or a 50% discount to the closing price of the  Company's  stock at the
time  exercised at the option of the Factor.  Both  warrants are for a five year
period.

At June 30, 2004, the Company had a factoring payable balance of $43,230.

                                      F-18


9. PAYROLL TAXES-ASSUMED IN MERGER

The  Company  assumed  $205,618 of payroll  tax  liabilities  in the merger with
Pacific Diagnostic Technologies,  Inc. The balance was $96,661 at June 30, 2004.
The Company is delinquent on payments of these payroll tax liabilities.

10. LONG TERM PAYABLES

Lease payable, interest at 7.9% to 15%, due various dates   $ 55,367
in 2005 to 2008
Note payable, DFS, interest at 15.99%, due Jun & Jul 2006      3,669
Notes payable, AP conversion, interest at 8%, due 2006        51,847
                                                            --------
                                                            $110,883
Current portion                                               47,504
                                                            --------
                                                              63,379

            The future maturity of the long term payables is as follows:

                                2005                        $ 47,504
                                2006                          43,122
                                2007                          19,243
                                2008                           1,014
                                                           ----------
                                Total                      $ 110,883
                                                           =========
11. CONVERTIBLE BONDS

         Bonds payable with interest at 9%, due on various
         dates in 2001 and 2002, convertible to shares of
         Common stock in increments of $1,000 or more.      $   21,354

         Bonds payable with interest at 12%, due July 2002,
         convertible to shares of common stock in increments
         of $500  or  more.                                     41,141
                                                            ==========

                                                            $  62,495
                                                            =========

Certain of the  outstanding  convertible  bonds have  matured as of December 31,
2002.  The holders of the matured  bonds do not wish to renew the bonds and have
asked for  payment;  however,  the Company does not have the cash to repay these
bonds.

Bondholders  have been asked to  exchange  their  bonds for  Series B  preferred
stock. As of June 30, 2004,  holders of $198,000 of the bonds including  accrued
interest had acted on this. The $198,000 is included in the liability section of
the financials under  "Liabilities in Process of Conversion to Stock," since the
preferred stock has not been issued.

12. CONVERTIBLE NOTES

The company  issued  $500,000  convertible  notes during the year ended June 30,
2004.  Each note bears a simple  interest rate of 10%. Notes are  convertible to
the common stock of the Company at $.06.  Additionally,  the holder will receive
one  bonus  warrant  for each  conversion  share.  Each  bonus  warrant  will be
exercisable  for a period of 5 years from the date of issuance into one share of
common stock at a price of $.10.

The total interest on these  convertible  notes for the year ended June 30, 2004
amounted to $15,177.

                                      F-19


13. LIABILITIES IN PROCESS OF CONVERSION TO STOCK

The Company  has a total of $470,629  liabilities  in process of  conversion  to
stock as of June 30, 2004. This amount consists of the following:

                  Bond payable                                  $198,268
                  Accounts payable                                20,147
                  Payrolls payable                               252,214
                                                                ---------
                                                                $470,629

Bonds for $188,268 are  convertible to one share of Series A Preferred stock for
each $.05 of debt owed by the Company.  Remaining $10,000 bond is convertible to
one share of Series B Preferred stock for each $.25 of debt owed by the Company.

Accounts  payable are  convertible to one share of Series C Preferred  stock for
each $1.00 of payable owed by the Company.

Payrolls  payable are  convertible to one share of Series A Preferred  stock for
each $.25 of debt owed by the Company.

14. LOANS PAYABLE - STOCKHOLDERS

The company has a loan payable  balance of $244,056 to the  stockholders at June
30, 2004. These loans are interest free, unsecured and due on demand.

15. STOCKHOLDERS' EQUITY

a.       Common Stock and Warrants

The Company has authorized 50 million shares of common stock with a par value of
$0.001  per  share.  Each share  entitles  the holder to one vote.  There are no
dividend or liquidation preferences, participation rights, call prices or rates,
sinking  fund  requirements,  or unusual  voting  rights  associated  with these
shares. During the year ended June 30, 2003, the Company established the Class L
warrants and initiated the process of  establishing  the Class A Preferred stock
which underlies these warrants.

Upon  surrender  of either a Class J or L  warrant,  the holder is  entitled  to
purchase one share of the Company's stock at the designated  exercise price. For
each warrant class, the number of warrants outstanding,  the exercise price, the
type of underlying stock, and the expiration dates are defined as follows:

Class J -  6,458,384  warrants  to  purchase  common  restricted  stock  with an
exercise price of $1.00 per share expired on January 14, 2004.

Class L - warrants were  established  in March 2003,  with an exercise  price of
$.25 per share, an expiration date of January 14, 2005 and Series A Preferred as
underlying  stock.  As of June 30,  2004,  holders  of Class J  exchanged  their
warrants for 3,063,432 Class L Warrants.

At June 30, 2004, the outstanding  warrants of classes A, B, C, D, E, F, G, H, I
and J have expired.

During the year ended June 30, 2004,  200,000 shares of common stock were issued
for services valued at $15,000.

During the year  ended  June 30,  2004,  1,773,695  shares of common  stock were
issued for conversion of bond amounting $106,422.

During the year ended June 30, 2004,  14,291  shares of common stock were issued
for debt settlement amounting $1,786.

                                      F-20


During the year ended June 30, 2004,  200,000 shares of warrants were issued for
consulting  services for three years beginning February 2004, valued at $41,572.
$5,774 was amortized  during the year ended June 30, 2004. The fair value of the
warrants  is  estimated  on the grant date using the  Black-Scholes  Model.  The
following assumptions were made in estimating fair value.

Annual rate of quarterly dividends                         0.00%
Discount rate - Bond Equivalent Yield                      3.50%


Expected life                                             3 years
Expected volatility                                        100%


       b.    Common Stock Reserved

At June 30, 2004, common stock was reserved for the following reasons:

        Outstanding convertible bond                           151,919 shares
        Exercise of Class L warrants                          3,063,432 shares

       c.    Stock Option Agreements

The Company granted 200,000 stock options to two employees during the year ended
June 30, 2004.

The  Company  recorded $ 4,000 as  compensation  expense  due to issuance of the
options, during the year ended June 30, 2004.

The number  and  weighted  average  exercise  prices of  options  granted by the
Company are as follows:

                                                      Outstanding
                                            Options     Weighted
                                            Number      Average
                                              of       Exercise
                                            Options        Price
                                           ---------   ---------
               Outstanding June 30, 2002   2,015,000   $    1.01
               Granted during the year             0           0
               Exercised                           0           0
               Expired/forfeited                   0           0
                                           ---------   ---------
               Outstanding June 30, 2003   2,015,000   $    1.01
               Granted during the year       200,000   $    0.13
               Exercised                           0           0
               Expired/forfeited                   0           0
                                           ---------   ---------
               Outstanding June 30, 2004   2,215,000   $    0.93
                                           =========   =========

                                      F-21


Following is a summary of the status of options outstanding at June 30, 2004:



                                    Outstanding Options                 Exercisable Options
                                        Weighted
                                         Average        Weighted        Weighted
                                        Remaining       Average         Average
                                       Contractual      Exercise        Exercise
Exercise Price       Number              Life            Price          Number            Price
- --------------      ---------     ------------------ -------------     ------------     -----------
                                                                          
$ 1.00-4.00        2,015,000           7 months        $ 1.01           2,015,000        $  0.93
$ 0.13               200,000           9 months        $ 0.13             200,000        $  0.93


Pro forma  information  regarding  the effect on  operations is required by SFAS
123, and has been  determined  as if the Company had  accounted for its employee
stock  options  under  the  fair  value  method  of that  statement.  Pro  forma
information  using the  Black-Scholes  method at the date of grant  based on the
following assumptions for the year ended June 30, 2004 and 2003 was as follows:

                  Expected life (years)                         1  year
                  Risk-free interest rate                    1.40% and 3.40%
                  Dividend yield                                0% and 0%
                  Volatility                                 45% and 100%


      d. Stock transactions approved by the shareholder's

At the annual meeting of the  shareholders  held June 30, 2004, the shareholders
approved  by a majority  vote to increase to  200,000,000  shares,  no par value
common stock,  and  50,000,000  shares no par value,  preferred  stock which the
corporation  shall have authority to issue. The board of directors is authorized
to divide the  preferred  stock  into any  number of classes or series,  fix the
designation  and  number of  shares  of each  such  series or class and alter or
determine the rights, preferences, privileges and restrictions of each or series
of preferred stock

Series A Preferred Stock

The  general  terms of the Series A Preferred  Stock is as follows:  Par value -
$0.00;  Liquidation  Preference  - $0.25 per share plus any  unpaid  accumulated
dividends;  Dividends -  cumulative  annual rate of $0.005 per share when and as
declared by the Board of Directors;  Conversion  Rights - convertible  to common
stock at a 1:1 ratio ;  Redemption  Rights - the Company has the right to redeem
part or all of the  stock  upon 30 days  written  notice  at a rate of $0.25 per
share plus all accumulated and unpaid dividends  thereon at the dividend rate of
$0.005  annually  per share;  Voting  Rights - one vote per share on all matters
requiring  shareholder vote. At June 30, 2004, the Company had 250,000 shares of
Series A Preferred Stock to be issued valued at $40,000 for the compensation.

Series B Preferred Stock

The  general  terms of the Series B Preferred  Stock is as follows:  Par Value -
$0.00;  Liquidation  Preference  - $0.25 per share plus any  unpaid  accumulated
dividends;  Dividends - cumulative  annual rate of $0.0005 per share when and as
declared by the Board of Directors;  Conversion  Rights - convertible  to common
stock at a 1:5 ratio (i.e.  1 share of Series B Preferred  stock is  convertible
into 5 shares of common stock) ;  Redemption  Rights - the Company has the right
to redeem  part or all of the  stock  upon 30 days  written  notice at a rate of
$0.25 per  share  plus all  accumulated  and  unpaid  dividends  thereon  at the
dividend rate of $0.0005 annually per share;  Voting Rights - one vote per share
on all matters requiring shareholder vote.
                                      F-22


Series C Preferred Stock

The  general  terms of the Series C Preferred  Stock is as follows:  Par value -
$0.00;  Liquidation  Preference  - $1.00 per share plus any  unpaid  accumulated
dividends;  Dividends  -  cumulative  annual  rate of $.0005  per share  when as
declared by the Board of Directors; Conversion Rights - 1:20 ratio (i.e. 1 share
of  Preferred  Series C stock is  convertible  into 20 shares of common  stock);
Redemption Rights - the Company has the right to redeem part or all of the stock
upon 30 days written notice at the rate of $1.00 per share plus all  accumulated
and unpaid dividends thereon at the dividend rate of $.0005 annually per share.;
Voting Rights - one vote per share on all matters requiring shareholder vote.

Liabilities in process of conversion to stock:

The Company has entered into  agreements  with various  vendors and employees to
convert  their  liabilities  into the  above,  three  preferred  series of stock
pending approval of same. The conversion rate varies. (note 13)

16. INCOME TAXES

The Company accounts for income taxes using the liability  approach to financial
accounting  and  reporting.  The  Company  has a  deferred  tax asset due to net
operating  loss   carryforwards  and  temporary   taxable   differences  due  to
stock-based  compensation  for income tax purposes.  Through June 30, 2004,  the
Company  incurred net operating  losses for federal tax purposes of  $8,000,000.
The net operating loss carryforward may be used to reduce taxable income through
the  year  2024.   The   availability   of  the  Company's  net  operating  loss
carryforwards  are  subject  to  limitation  if there is a 50% or more  positive
change in the ownership of the Company's stock.

The deferred tax assets are  $3,057,951  and  $2,718,450 as of June 30, 2004 and
2003,  respectively.  However,  due to the ongoing  nature of the losses and the
potential  inability  of the Company to ever  realize the  benefit,  a valuation
allowance has been established for 100% of the deferred tax asset. Net operating
loss carryforwards expire at various times through the year 2023.

The effects of temporary  differences that give rise to significant  portions of
the  deferred  tax  benefit  for the  years  ended  June  30,  2004 and 2003 are
presented below:

                                  2004         2003
                                  -----        -----

Net operating loss              319,441     163,156
Stock-based compensation         20,060      75,202
                               --------    --------
                                339,501     238,358

Less-valuation allowance       (339,501)   (238,358)
                               --------    --------
                       Total       --          --
                               ========    ========


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

                                      F-23

                                               June 30,     June 30,
                                                 2004         2003
                                               --------     --------

Tax expense (credit) at statutory rate-federal   (32)%       (32)%
State tax expense net of federal tax              (8)         (8)
Permanent differences                              1           1
Valuation allowance                               39          39
                                               --------     -------
Tax expense at actual rate                        --          --
                                               ========     =======



17. SUPPLEMENTAL DISCLOSURE OF CASH FLOWS

The Company  prepares its statements of cash flows using the indirect  method as
defined under the Financial Accounting Standard No. 95.

The  Company  paid $-0- for income tax during the years  ended June 30, 2004 and
2003. The Company paid $29,937 and $14,256  interest during the years ended June
30, 2004 and 2003, respectively.

The cash flow  statement  for the year ended June 30,  2004 does not include the
following non-cash investing and financing transactions;

     o   200,000  shares of common  stock  were  issued for  services  valued at
         $15,000.
     o   1,773,695  shares of common  stock were issued for  conversion  of bond
         amounting to $106,422.
     o   14,291 shares of common stock were issued for debt settlement amounting
         $1,786.
     o   Machinery and equipment was acquired  through  financing  agreements in
         the amount of $67,125.
     o   Accounts  payable  were  converted  to notes  payable  in the amount of
         $30,965.

18. MAJOR CUSTOMERS AND SUPPLIERS

The  Company had one  customer  that  accounted  for 21% of revenue for the year
ended June 30, 2004.  Accounts  receivable  from this major customer was $-0- at
June 30, 2004.  For the year ended June 30, 2003, the Company had four customers
that  accounted  for more than 55% of revenue.  Accounts  receivable  from these
major customers were approximately $69,000 at June 30, 2003.

There are  currently  only two known  suppliers  of aperture  cards that use dry
silver film. A continued supply of aperture card media is crucial to the success
of the Company  because  without cards,  customers have no use for the Company's
equipment, services and software.

19. COMMITMENTS AND CONTINGENCIES

a)    Operating Leases

The  Company  leases  its  California  office  facility  under a  non-cancelable
operating  lease that requires  total monthly  rental  payments of $2,846.  Upon
expiration  on March 31,  2004,  the Company  leased the  premises on a month to
month basis until June 30, 2004.  Effective  July 1, 2004 the Company  relocated
their executive offices to Huntington Beach,  California and entered into a four
year lease agreement.  The agreement contains a base rent escalation clause. The
Company leases its Idaho office facility under a month-to-month rental agreement
at $1,384 per month.  For the years ended June 30, 2004 and 2003,  rent  expense
for these operating leases totaled $56,997 and $45,279, respectively.

                                      F-24


The future minimum lease payments under non-cancelable leases are as follows:

                       2005                   $ 79,661
                       2006                     81,354
                       2007                     83,049
                       2008                     84,744
                                             ---------
                                              $328,808

b)    Purchase Obligation

The Company has  established a licensing  agreement  with Qtek Aperture Card AB.
Under the  agreement,  the  Company is  required  to purchase at least 25 of the
Q4305 units at  approximately  $18,000 each before June 30, 2004. As of June 30,
2004,  the Company had  purchased 15 units under the  agreement.  The  agreement
expired June 30, 2004. The Company did not purchase the remaining units. Several
of the original units purchased were inoperable and required on-site repairs due
to  omissions  in  manufacturing.  Qtek  Aperture  Card AB has  refused  to take
responsibility  for the failed  units and has denied  the  Company's  request to
return tooling,  designs and other intellectual  property.  The Company believes
that Qtek  Aperture  Card AB has  breached  this  agreement  and has no  further
obligation  to purchase  units from them.  The financial  statements  contain no
accrued liability in connection with this transaction.

c)    Income Tax Return Filings

The Company has not filed income tax returns for several years. Due to operating
losses,  income tax liability and penalties would not be  substantial.  However,
the State of California could  potentially  revoke the Company's  charter if the
Company does not become current on its income tax return filings.

d) Securities and Exchange Commission Inquiry

On  September  17,  2002,  the  Company  was  advised  by the  staff of the U.S.
Securities and Exchange  Commission that they will recommend that the Commission
file civil injunctive lawsuits against the Company and its president,  Thomas W.
Sims.  The suits would  allege that the Company  violated  Section  17(a) of the
Securities Act of 1933 and Sections  10(b) and 13(a) of the Securities  Exchange
Act of 1934 and Rules 10b-5,  13a-1,  and 13a-13,  based on false and misleading
statements in press releases disseminated by the Company on October 22, 2001 and
October 25, 2001,  regarding the Company's  investment in PanaMed Corp.  and the
press releases  disseminated  on January 8, 2002 and March 20, 2002, and failure
to timely file annual and quarterly  reports with the  Commission.  On March 25,
2003,  the Company  signed,  without  admitting  or denying the  allegations,  a
proposed settlement  agreement with the U.S. Securities and Exchange Commission,
which permanently  restrains and enjoins the Company from engaging in acts which
would  constitute  violations of these  regulations in the future.  On August 6,
2003, a final judgment was entered by the U.S. District Court,  Central District
of California,  against the Company which permanently  enjoined the Company from
violating  Section  10(b)  of  the  Exchange  Act  and  Rule  10b-5  promulgated
thereunder by using any means or instrumentality of interstate  commerce,  or of
the mails,  or of any national  securities  rtifice to defraud;  (B) to make any
untrue  statement  of a  material  fact or  omitting  to state a  material  fact
necessary  in  order  to  make  the  statements   made,  in  the  light  of  the
circumstances  under which they were made, not  misleading;  or (C) to engage in
any act,  practice,  or course of business  which operates or would operate as a
fraud or deceit upon any person,  in connection with the purchase or sale of any

                                      F-25


security.  Further,  the final  judgment  permanently  enjoined the Company from
violating  Section  13(a)  of the  Exchange  Act  and  Rules  13a-1  and  13a-13
promulgated  thereunder,  by failing to file with the  Commission  in accordance
with Commission rules and regulations, information and documents required by the
Commission  to keep current  information  and  documents  required in or with an
application  or  registration  statement  filed  pursuant  to  Section 12 of the
Exchange Act or annual or quarterly reports as the Commission has prescribed.

20. BASIC AND DILUTED NET LOSS PER SHARE

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

Weighted  average  number of shares used to compute  basic and diluted  loss per
share for the years  ended June 30,  2004 and 2003 are the same since the effect
of dilutive securities is anti-dilutive.

21. GOING CONCERN

The  accompanying  financial  statements  have been prepared in conformity  with
generally accepted accounting principles,  which contemplate continuation of the
Company as a going concern.  This basis of accounting  contemplates the recovery
of the Company's  assets and the  satisfaction  of its liabilities in the normal
course of business.  Through June 30, 2004, the Company had incurred  cumulative
losses of  $23,061,065  including  net losses of $998,531  and  $701,053 for the
fiscal years 2004 and 2003,  respectively.  In view of the matters  described in
the preceding paragraph, recoverability of a major portion of the recorded asset
amounts  shown in the  accompanying  balance sheet is dependent  upon  continued
operations of the Company, which in turn is dependent upon the Company's ability
to raise  additional  capital,  obtain  financing  and to  succeed in its future
operations.  The financial statements do not include any adjustments relating to
the  recoverability  and classification of recorded asset amounts or amounts and
classification  of  liabilities  that might be  necessary  should the Company be
unable to continue as a going concern.

Management  has taken the following  steps to revise its operating and financial
requirements,  which it believes are  sufficient to provide the Company with the
ability to continue as a going concern.  Management devoted  considerable effort
during the period ended June 30,  2004,  cing (ii)  controlling  of salaries and
general and  administrative  expenses (iii)  management of accounts  payable and
(iv) evaluation of its distribution and marketing methods.

22. SUBSEQUENT EVENTS

On July 27, 2004, the Company entered into a Securities  Purchase Agreement with
an  individual  investor.  This investor  purchased a convertible  debenture for
$50,000 which bears simple interest at 10%. The Debenture was converted into the
Common Stock of the Company at a price of $0.10 per share. The investor received
one bonus warrant for each conversion  share.  Each warrant is exercisable  into
one share of Common Stock at $0.15 per share.  The  warrants  expire on July 27,
2007.

                                      F-26


On July 29,  2004,  the Company  entered  into an  Agreement  with  LANGLEY PARK
INVESTMENTS PLC, a London  Investment  Company to issue 14,000,000 shares of the
Company's  common  stock to Langley in return for  1,145,595  shares of Langley.
Fifty percent of Langley shares issued to the Company under this agreement is to
be held in escrow for two years. At the end of two years if the market price for
the Company's  common stock is at or greater than the Initial  Closing Price the
escrow agent will  release the full  amount.  In the event that the market price
for the Company's common stock is less than the Initial Closing Price the amount
released will be adjusted.

Langley is in the process of attaining  listing with the United Kingdom  Listing
Authority.  Langley's  initial  offering  price is  1(pound)  (One  Pound UK per
share).  The Company's shares are to be held by Langley for a period of at least
two years.  Langley shares issued to the Company are to be free trading.  In the
event  that  this  transaction  does not  close  the  14,000,000  shares  of the
Company's stock held in escrow are to be returned to the Company.

On August 2, 2004,  the Company  signed a Master  Lease  Agreement  with Vencore
Solutions,  LLC, a venture leasing company located in Lake Oswego, Oregon. Under
the agreement the Company  established a lease line of credit for up to $240,000
in equipment  financing.  This is a capital lease where the Company pays monthly
rental  rate  equal to 3.45% of the total  hardware  purchases  and 6.35% of the
total software purchases. The lease term for hardware purchases is 36 months and
18 months for  software.  The  effective  annual  interest  rate is roughly  8%.
Vencore  Solutions  received  144,000 warrants for the Company's common stock at
$0.10 per share, expiring on August 2, 2007 in connection with this agreement.

On August 4, 2004 the Company  entered into an agreement with the private equity
fund, Golden Gate Investors,  based in San Francisco,  CA to provide the Company
with $3.3 million in capital.

The deal is  structured  as two year  $300,000  convertible  notes paying 5 3/4%
interest and 3,000,000  warrants to purchase  common stock for a period of three
years at  $1.00.  The  "Conversion  Price"  shall be equal to the  lesser of (i)
$0.50, or (ii) 80% of the average of the 5 lowest Volume Weighted Average Prices
during the 20 Trading Days prior to Holder's  election to convert,  or (iii) 80%
of the  Volume  Weighted  Average  Price on the  Trading  Day prior to  Holder's
election  to  convert  market  price  of the  Company's  common  stock  prior to
conversion.

Upon  conversion of the note, the fund is obligated to  simultaneously  exercise
the $1.00 warrants  providing added funding to the company.  The Warrant must be
exercised  concurrently with the conversion of this Debenture in an amount equal
to ten times the dollar amount of the Debenture conversion.

On August 17, 2004 the company entered into a Securities Purchase Agreement with
an individual  investor to purchase 2 convertible  debentures  each for $100,000
which bears  simple  interest at 10%.  The initial  Debenture  was  purchased at
closing.  The  second  Debenture  will  be  purchased  within  five  days  of  a
registration  statement being declared  effective covering the Conversion Shares
and Warrant  Shares.  Debentures  are  convertible  into the Common stock of the
Company.  Conversion  Price per share shall be the lower of (i) $0.10  ("Maximum
Base  Price");  or (ii) in the  event  the  Borrower  enters  into an  agreement
subsequent  to execution  of the  Securities  Purchase  Agreement to sell Common
Stock or a  convertible  instrument  that  converts  into Common  Stock prior to
conversion of this Debenture at a price less than the  Conversion  Price of this
Debenture,  then the  Conversion  Price of this  Debenture  shall be immediately
reset to a lower  Conversion  Price equal to that  described  in the  subsequent
agreement.  Warrants are exercisable at $0.12 per share into the Common Stock of
the Company and expire on August 17, 2007.

                                      F-27


On  September  27,  2004,  the  Company  was in  process of  converting  various
liabilities and stock based compensation to shares of stock as follows:

4,682,572  shares of common  stock were issued as repayment of $211,056 in loans
from stockholders.  In addition,  1,800,000 warrants to purchase common stock at
$0.175 per share expiring November 6, 2008,  100,000 warrants to purchase common
stock at $0.16 per share  expiring June 24, 2006,  142,857  warrants to purchase
common stock at $0.13 per share expiring  July23,  2006 and 400,000  warrants to
purchase common stock at $0.175 expiring November 7, 2008 were granted.

400,000 shares of common stock were issued as repayment of $32,300 in loans from
a stockholder.  As part of the agreement, the Company forgave $6,000 owed to the
Company by the stockholder.

1,008,054  shares of Series A  preferred  stock  were  issued as  conversion  of
$252,213 in back payroll.  The Series A preferred stock is convertible to common
stock on a 1:1 basis.

2,250,000  shares of Series A preferred  stock were issued as  compensation  for
services  in the amount of  $140,000.  250,000  shares  valued at  $40,000  were
recorded as shares to be issued during the year ended June 30, 2004.  The series
A preferred stock is convertible to common stock on a 1:1 basis.

724,077 shares of Series A preferred stock were issued for a $36,204 convertible
bond.  The series A  preferred  stock is  convertible  to common  stock on a 1:1
basis.

648,255  shares  of  Series B  preferred  stock  were  issued  for  $162,064  in
convertible bonds. The Series B preferred stock is convertible into common stock
on a 1:5 basis.  One share of Series B  preferred  stock is  convertible  into 5
shares of common stock.

32,000  shares of Series B  preferred  stock and  175,000  of common  stock were
issued  to  satisfy  a past  due  agreement.  The  Series B  preferred  stock is
convertible  into common  stock on a 1:5 basis.  One share of Series B preferred
stock is convertible into 5 shares of common stock.

20,148  shares of Series C preferred  stock were issued in conversion of $20,148
in accounts  payable.  The Series C preferred  stock is convertible  into common
stock on a 1:20 basis. One share of Series C preferred stock is convertible into
20 shares of common stock.

                                      F-28



                             QUINTEK TECHNOLOGIES, INC.
                                 BALANCE SHEET
                               SEPTEMBER 30, 2004
                                   (UNAUDITED)

                                     ASSETS
CURRENT ASSETS:
                                                                           
       Cash & cash equivalents                                                $     11,670
       Accounts receivable (net of allowance for doubtful accounts $15,179)         36,685
       Prepaid expenses                                                              9,180
       Investments in marketable securities                                      1,330,000
                                                                              ------------
              Total current assets                                               1,387,535

PROPERTY AND EQUIPMENT, net                                                        276,708

OTHER ASSETS:
       Deposits                                                                     36,748
       Intangible assets, net                                                        6,447
       Other assets                                                                    883
                                                                              ------------

TOTAL ASSETS                                                                  $  1,708,322
                                                                              ============

                             LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
       Accounts payable & accrued expenses                                    $    587,296
       Factoring payables                                                           20,000
       Payroll and payroll taxes payable                                           176,155
       Payroll taxes assumed in merger                                              96,661
       Current portion of long-term debt                                           136,562
       Loans payable-stockholders                                                   32,300
       Convertible bonds                                                            62,495
       Convertible debentures                                                      100,000
       Convertible notes                                                           500,000
       Deferred revenue                                                             59,600
       Liabilities in process of conversion to stock                               470,629
       Dividend payable                                                              2,813
                                                                              ------------
              Total current liabilities                                          2,244,511

LONG TERM DEBT, net of current portion                                             188,091

CONVERTIBLE DEBENTURES                                                             225,000

SHARES TO BE ISSUED - Series A Redeemable Preferred stock, 2,250,000 shares        360,000

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY
       Common stock, .001 par value; authorized shares 200,000,000
       issued and outstanding  shares 71,122,454                                   711,225
       Additional paid in capital                                               23,535,509
       Shares to be issued-Common Stock 1,000,000 shares                           100,000
       Unamortized consulting fees                                                 (66,894)
       Investments held in escrow                                               (1,330,000)
       Accumulated deficit                                                     (24,259,120)
                                                                              ------------
              Total stockholders' deficit                                       (1,309,280)
                                                                              ------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                       1,708,322
                                                                              ============

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

                                      F-29




                           QUINTEK TECHNOLOGIES, INC.
                            STATEMENTS OF OPERATIONS
          FOR THE THREE MONTH PERIODS ENDED SEPTEMBER 30, 2004 AND 2003
                                   (UNAUDITED)

                                                             2004            2003
                                                        ------------    ------------
                                                                  
Net revenue                                             $    114,266    $    108,177

Cost of revenue                                               84,481          52,910
                                                        ------------    ------------

Gross profit                                                  29,785          55,267

Operating expenses
       Selling, general and administrative                   840,109         165,898
       Stock based compensation                              362,000
                                                        ------------    ------------
Total Operating Expenses                                   1,202,109         165,898
                                                        ------------    ------------
Loss from Operations                                      (1,172,323)       (110,631)

Non-operating income (expense):
       Other income                                            3,325           2,982
       Interest expense                                      (25,443)         (6,060)
                                                        ------------    ------------
Total non-operating income (expense)                         (22,117)         (3,078)

                                                        ------------    ------------
Loss before provision for income taxes                    (1,194,441)       (113,709)

Provision for income taxes                                       800            --

                                                        ------------    ------------
Net loss                                                  (1,195,241)       (113,709)

Dividend requirement for preferred stock                       2,813            --

                                                        ------------    ------------
Net loss applicable to common shareholders              $ (1,198,053)   $   (113,709)
                                                        ============    ============

Basic and diluted weighted average shares outstanding     58,506,835      46,762,008
                                                        ============    ============

Basic and diluted net loss per share                           (0.02)          (0.00)
                                                        ------------    ------------

Basic and diluted net loss per share for dividends
  for preferred stock                                           0.00            0.00
                                                        ------------    ------------

Basic and diluted net loss per share applicable
  to common shareholders                                       (0.02)          (0.00)
                                                        ============    ============


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

                                      F-30




                           QUINTEK TECHNOLOGIES, INC.
                            STATEMENTS OF CASH FLOWS
          FOR THE THREE MONTH PERIODS ENDED SEPTEMBER 30, 2004 AND 2003
                                   (UNAUDITED)
                                                                         2004            2003
                                                                      -----------    -----------
               CASH FLOWS FROM OPERATING ACTIVITIES:
                                                                               
    Net loss                                                          $(1,198,053)   $  (113,709)
    Adjustments to reconcile net loss to net cash
       provided by (used in) operating activities:
       Depreciation and amortization                                       28,456         11,274
       Stock based compensation                                           362,000           --
       Issuance of stock for consulting services                          170,000           --
       Stock options granted                                                1,500           --
       (Increase) decrease in current assets:
                Accounts receivable                                        (7,949)        67,129
                Inventory                                                    --           (1,384)
                Other assets                                               (8,291)         1,620
                Prepaid expenses                                           (3,916)          --
                Deposits                                                  (28,332)          --
       Increase (decrease) in liabilities:
                Dividend payable                                            2,813
                Accounts payable and accrued expenses                     148,471         43,298
                Payroll and payroll taxes payable                         (10,984)        (7,676)
                Deferred revenue                                          (27,440)          --
                Liabilities in process of conversion to stock                --             --
                                                                      -----------    -----------
    Total adjustments                                                     626,326        114,261
                                                                      -----------    -----------
               Net cash provided (used) in operating activities          (571,727)           552
                                                                      -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES
       Purchase of other assets                                              --           (9,092)
                                                                      -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
       Payments on factoring payables                                     (23,230)      (126,890)
       Proceeds (payment) on loans from stockholders                         --          100,000
       Proceeds( payments) on notes payable,                               (8,973)        18,824
       Proceeds from issuance of debentures                               325,000           --
       Proceeds from issuance of convertible notes                         70,000           --
       Proceeds from issuance of common stock and warrants                205,000           --
                                                                      -----------    -----------
               Net cash provided (used in) by  financing activities       567,797         (8,066)
                                                                      -----------    -----------

NET DECREASE IN CASH & CASH EQUIVALENTS                                    (3,930)       (16,606)

CASH & CASH EQUIVALENTS, BEGINNING BALANCE                                 15,600         21,162
                                                                      -----------    -----------
CASH & CASH EQUIVALENTS, BEGINNING BALANCE                            $    11,670    $     4,556
                                                                      ===========    ===========


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

                                      F-31


                              QUINTEK TECHNOLOGIES,
                        NOTES TO THE FINANCIAL STATEMENTS
                                   (Unaudited)


1.     Description of business

         Quintek  Electronics,  Inc., our predecessor  company,  founded in July
1991, acquired technology, related assets and patent rights to its aperture card
business during 1991 and 1992. On January 14, 1999,  Quintek  Electronics,  Inc.
was acquired in a merger by Pacific  Diagnostics  Technologies,  Inc. as part of
their Chapter 11 Plan of  Reorganization,  and the  surviving  entity's name was
changed to Quintek  Technologies,  Inc.  Since the merger,  Quintek  Electronics
continued  to sell its  aperture  card  products  and all former  operations  of
Pacific Diagnostics Technologies,  Inc. were discontinued. On February 24, 2000,
we  acquired  all  of the  out  standing  shares  of  common  stock  of  Juniper
Acquisition  Corporation.  Upon  effectiveness  of  that  acquisition,   Quintek
Electronics  elected to become the  successor  issuer to Juniper  for  reporting
purposes under the Securities Exchange Act of 1934.

         We have been a  manufacturer  of hardware  and  software  and a service
provider  to the  corporate  and  public  sector  markets  since  1991.  Our new
division,  Quintek Services, Inc. delivers business process outsourcing services
and information  lifecycle management solutions to document intensive industries
such as healthcare and financial  services.  Business process outsourcing is the
delegation,  by the customer,  of the operational  responsibility for a business
process's  execution and  performance  within the  customer's  environment.  The
solutions  and  services we provide  enable  organizations  to secure and manage
their information and document business processes more efficiently.

         Quintek  Services  provides  business process  outsourcing  services to
Fortune  500,  Russell  2000  companies  and public  sector  organizations.  Our
business process  outsourcing  services range from the digitizing,  indexing and
uploading of source  documents  through  simple  customer-specific,  rules-based
decision making.

         We sell  hardware,  software and  services  for  printing  large format
drawings  such as  blueprints  and computer  aided design files  directly to the
microfilm  format of aperture cards. We are the only  manufacturer of a patented
chemical-free desktop microfilm printer for aperture cards.


2.     Basis of Presentation

The accompanying  unaudited financial  statements of Quintek  Technologies,  Inc
(the "Company) have been prepared in accordance  with the rules and  regulations
of the  Securities  and  Exchange  Commission  for the  presentation  of interim
financial  information,  but do not include all the  information  and  footnotes
required by generally  accepted  accounting  principles  for complete  financial

                                      F-32


                              QUINTEK TECHNOLOGIES,
                        NOTES TO THE FINANCIAL STATEMENTS
                                   (Unaudited)


statements.  In the opinion of management,  the accompanying unaudited financial
statements of the Company  include all  adjustments  (consisting  only of normal
recurring  adjustments)  considered  necessary to present  fairly its  financial
position as of  September  30,  2004,  the results of  operations  for the three
months ended September, 2004 and 2003, and cash flows for the three months ended
September 30, 2004 and 2003.  The  operating  results for the three month period
ended September 30, 2004 are not necessarily  indicative of the results that may
be expected for the year ending June 30, 2005 The audited  financial  statements
for the year  ended  June 30,  2004  were  filed on  October  1,  2004  with the
Securities and Exchange  Commission and is hereby  referenced.  The  information
included in this Form 10-QSB  should be read in  conjunction  with  Management's
Discussion and Analysis and financial  statements and notes thereto  included in
the Company's 2004 Form 10-KSB.


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

Research and Development
Research and  development  costs are charged to operations when incurred and are
included in operating  expenses.  The amount charged to operations for the three
months ended September 30, 2004 and 2003 was $15,073 and 12,406, respectively.

Marketable securities

On July 29,  2004,  the Company  entered  into an  Agreement  with  LANGLEY PARK
INVESTMENTS PLC, a London  Investment  Company to issue 14,000,000 shares of the
Company's  common  stock to Langley in return for  1,145,595  shares of Langley.
Fifty percent of Langley shares issued to the Company under this agreement is to
be held in escrow for two years.  The Company has recorded such shares as shares
held in  escrow  amounting  $1,330,000  as  contra  equity  in the  accompanying
financial  statements.  At the end of two  years  if the  market  price  for the
Company's  common  stock is at or greater  than the  Initial  Closing  Price the
escrow agent will  release the full  amount.  In the event that the market price
for the Company's common stock is less than the Initial Closing Price the amount
released will be adjusted.

Langley  attained  listing  with  the  United  Kingdom  Listing  Authority.  The
Company's  shares are to be held by Langley  for a period of at least two years.
Langley shares issued to the Company are to be free trading.

The  Company's  marketable  securities  (Langley's  shares)  are  classified  as
available-for-sale   and,  as  such,  are  carried  at  fair  value.  Securities
classified as available-for-sale  may be sold in response to changes in interest
rates,  liquidity  needs,  and for other purposes.  The investment in marketable
securities  represents less than twenty percent (20%) of the outstanding  common
stock  and  stock  equivalents  of the  investee,  As such,  the  investment  is
accounted for in accordance with the provisions of SFAS No. 115.

Unrealized holding gains and losses for marketable  securities are excluded from
earnings and reported as a separate component of stockholder's equity.  Realized
gains and losses for securities classified as available-for-sale are reported in
earnings  based  upon  the  adjusted  cost of the  specific  security  sold.  On
September 30, 2004, the investments  have been recorded at $1,330,000 based upon
the fair value of the marketable securities.

Marketable  securities  classified  as  available  for  sale  consisted  of  the
following as of September 30, 2004:

                                      F-33


                              QUINTEK TECHNOLOGIES,
                        NOTES TO THE FINANCIAL STATEMENTS
                                   (Unaudited)




                                                          Market           Accum.         Number of
         Investee Name                Cost at            Value at        Unrealized     Shares Held at
            (Symbol)            September 30, 2004  September 30, 2004  Gain (Loss)  September 30, 2004
- ---------------------------------------------------------------------------------------------------------
                                                                                     
 Langley Park Investments, PLC          $ 1,330,000        $ 1,330,000           $ -             572,798

                                -----------------------------------------------------
      Totals                            $ 1,330,000        $ 1,330,000           $ -
                                =====================================================


Stock based compensation

SFAS No. 123 prescribes  accounting and reporting  standards for all stock-based
compensation plans, including employee stock options, restricted stock, employee
stock  purchase  plans and stock  appreciation  rights.  SFAS No.  123  requires
compensation  expense to be recorded (i) using the new fair value method or (ii)
using the existing  accounting rules  prescribed by Accounting  Principles Board
Opinion No. 25,  "Accounting for stock issued to employees" (APB 25) and related
interpretations  with  proforma  disclosure  of what net income and earnings per
share would have been had the Company  adopted  the new fair value  method.  The
Company  has chosen to account for  stock-based  compensation  using  Accounting
Principles Board Opinion No. 25,  "Accounting for Stock Issued to Employees" and
has  adopted  the  disclosure   only   provisions  of  SFAS  123.   Accordingly,
compensation  cost for stock  options is measured as the excess,  if any, of the
quoted  market  price of the  Company's  stock at the date of the grant over the
amount an employee is required to pay for the stock.

The  Company's  board  of  directors  authorized  a stock  award  and  long-term
incentive  plan which  includes  stock  appreciation  rights and  certain  stock
incentive awards. The plan was approved by the shareholders as of June 30, 2004.

Basic and diluted net loss per share

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

                                      F-34


                              QUINTEK TECHNOLOGIES,
                        NOTES TO THE FINANCIAL STATEMENTS
                                   (Unaudited)

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

Reporting segments

Statement of financial  accounting standards No. 131, Disclosures about segments
of an  enterprise  and related  information  (SFAS No.  131),  which  superseded
statement of financial  accounting  standards  No. 14,  Financial  reporting for
segments of a business enterprise, establishes standards for the way that public
enterprises  report  information  about operating  segments in annual  financial
statements  and  requires  reporting  of selected  information  about  operating
segments  in interim  financial  statements  regarding  products  and  services,
geographic areas and major customers. SFAS No. 131 defines operating segments as
components  of an  enterprise  about which  separate  financial  information  is
available that is evaluated  regularly by the chief operating  decision maker in
deciding how to allocate  resources  and in assessing  performances.  Currently,
SFAS 131 has no effect on the Company's  financial  statements as  substantially
all of the Company's operations are conducted in one industry segment.

Reclassifications

Certain  comparative  amounts have been reclassified to conform with the current
period presentation.

Recent Pronouncements

In  December  2002,  the FASB issued  SFAS No. 148  "Accounting  for Stock Based
Compensation-Transition  and  Disclosure".  SFAS No.  148 amends  SFAS No.  123,
"Accounting for Stock Based  Compensation",  to provide  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 Statement 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.  The Statement is effective for the Companies' interim reporting period
ending January 31, 2003.

In  compliance  with FAS No. 148,  the Company has elected to continue to follow
the  intrinsic  value  method  in  accounting  for  its   stock-based   employee
compensation  plan  as  defined  by APB  No.  25 and  has  made  the  applicable
disclosures below.

Had the Company  determined  employee stock based  compensation  cost based on a
fair value  model at the grant date for its stock  options  under SFAS 123,  the
Company's  net  earnings  per share  would have been  adjusted  to the pro forma
amounts  for the period  ended  September  30,  2004 and 2003,  as follows ($ in
thousands, except per share amounts):

                                      F-35


                              QUINTEK TECHNOLOGIES,
                        NOTES TO THE FINANCIAL STATEMENTS
                                   (Unaudited)


                                                 Period ended September 30,
                                                    2004           2003
                                               -------------     -----------

     Net loss - as reported                    $  (1,194$             (114)
     Stock-Based employee compensation
       expense included in reported net
       income, net of tax                           --                --

     Total stock-based employee
       compensation expense determined
       under fair-value-based method for all
       rewards, net of tax                          (362)             --
                                               -------------     -----------
     Pro forma net loss                        $  (1,556)        $    (114)
                                               =============     ===========
E    arnings (loss) per share:

     Basic, as reported                        $      (0.02)     $    (0.00)
     Diluted, as reported                      $      (0.02)     $    (0.00)
     Basic, pro forma                          $      (0.02)     $    (0.00)
     Diluted, pro forma                        $      (0.02)     $    (0.00)

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

In December  2003,  the  Financial  Accounting  Standards  Board (FASB) issued a
revised  Interpretation  No. 46,  "Consolidation of Variable Interest  Entities"
(FIN 46R). FIN 46R addresses  consolidation by business  enterprises of variable
interest  entities and significantly  changes the  consolidation  application of
consolidation   policies  to  variable  interest  entities  and,  thus  improves
comparability  between  enterprises  engaged  in similar  activities  when those
activities are conducted  through variable interest  entities.  The Company does
not hold any variable interest entities.

                                      F-36


                              QUINTEK TECHNOLOGIES,
                        NOTES TO THE FINANCIAL STATEMENTS
                                   (Unaudited)

In March 2004, the Emerging  Issues Task Force  ("EITF")  reached a consensus on
Issue  No.  03-1,  "The  Meaning  of  Other-Than-Temporary  Impairment  and  its
Application  to Certain  Investments."  The EITF  reached a consensus  about the
criteria  that should be used to  determine  when an  investment  is  considered
impaired,  whether that impairment is other-than-temporary,  and the measurement
of an  impairment  loss and how that criteria  should be applied to  investments
accounted for under SFAS No. 115, "ACCOUNTING IN CERTAIN INVESTMENTS IN DEBT AND
EQUITY   SECURITIES."  EITF  03-01  also  included   accounting   considerations
subsequent to the recognition of an other-than-temporary impairment and requires
certain  disclosures  about  unrealized  losses that have not been recognized as
other-than-temporary   impairments.   Additionally,   EITF  03-01  includes  new
disclosure  requirements  for  investments  that are  deemed  to be  temporarily
impaired.  In September  2004, the Financial  Accounting  Standards Board (FASB)
delayed  the  accounting  provisions  of  EITF  03-01;  however  the  disclosure
requirements remain effective for annual reports ending after June 15, 2004. The
Company will evaluate the impact of EITF 03-01 once final guidance is issued.


In April of 2004,  the EITF reached  consensus on the guidance  provided in EITF
Issue No. 03-6,  "Participating  Securities and the Two-Class  Method under SFAS
No. 128  Earnings  Per  Share"  ("EITF  03-6").  EITF 03-6  clarifies  whether a
security  should be  considered  a  "participating  security"  for  purposes  of
computing  earnings per share ("EPS") and how earnings  should be allocated to a
"participating  security"  when using the two-class  method for computing  basic
EPS.  The  adoption  of EITF  03-6  does not have a  significant  impact  on the
Company's financial position or results of operations.


In May of 2004,  the  FASB  revised  FASB  Staff  Position  ("FSP")  No.  106-1,
"Accounting  and Disclosure  Requirements  Related to the Medicare  Prescription
Drug,  Improvement  and  Modernization  Act of 2003" and issued  FSP No.  106-2,
"Accounting  and Disclosure  Requirements  Related to the Medicare  Prescription
Drug,  Improvement and Modernization  Act of 2003" ("FSP No. 106-2").  FSP 106-2
provides accounting guidance to the employers who sponsor post retirement health
care plans that provide  prescription  drug benefits;  and the prescription drug
benefit provided by the employer is "actuarially  equivalent" to Medicare Part D
and hence  qualifies  for the subsidy  under the  Medicare  amendment  act.  The
adoption  of FSP  106-2  does not have a  significant  impact  on the  Company's
financial position or results of operations.

SEC  Staff  Accounting  Bulletin  (SAB)  No.  105,  "APPLICATION  OF  ACCOUNTING
PRINCIPLES TO LOAN  COMMITMENTS,"  summarizes  the views of the staff of the SEC
regarding the application of generally  accepted  accounting  principles to loan
commitments  accounted for as derivative  instruments.  SAB No.105 provides that
the  fair  value  of  recorded  loan  commitments  that  are  accounted  for  as
derivatives  under SFAS No. 133,  "ACCOUNTING  FOR  DERIVATIVE  INSTRUMENTS  AND
HEDGING  ACTIVITIES,"  should not  incorporate  the  expected  future cash flows
related to the associated servicing of the future loan. In addition, SAB No. 105
requires  registrants to disclose their accounting  policy for loan commitments.
The provisions of SAB No. 105 must be applied to loan commitments  accounted for
as derivatives  that are entered into after March 31, 2004. The adoption of this
accounting  standard does not have a material impact on the Company's  financial
statements.

                                      F-37


                            QUINTEK TECHNOLOGIES,
                        NOTES TO THE FINANCIAL STATEMENTS
                                   (Unaudited)


3.      PROPERTY AND EQUIPMENT

Property and equipment at September 30, 2004, consists of the following:

              Scanning Equipment              $ 193,677
              Computer and office equipment     111,752
                Other depreciable assets        102,880
              Software                           76,164
              Furniture and fixture              35,589
                                              ---------
                                                520,062
              Accumulated depreciation         (243,354)
                                              ---------
                                              $ 276,708
                                              =========

4.       INTANGIBLE ASSETS
The  Company  evaluates  intangible  assets  and  other  long-lived  assets  for
impairment,  at least on an annual  basis and  whenever  events  or  changes  in
circumstances  indicate that the carrying value may not be recoverable  from its
estimated  future  cash  flows.   Recoverability  of  intangible  assets,  other
long-lived assets and, goodwill is measured by comparing their net book value to
the related projected  undiscounted cash flows from these assets,  considering a
number  of  factors  including  past  operating   results,   budgets,   economic
projections, market trends and product development cycles. If the net book value
of the  asset  exceeds  the  related  undiscounted  cash  flows,  the  asset  is
considered  impaired,  and a second test is  performed  to measure the amount of
impairment  loss.  Potential  impairment of goodwill after July 1, 2002 has been
evaluated in accordance with SFAS No. 142. The SFAS No. 142 is applicable to the
financial  statements  of the Company  beginning  July 1, 2002.  Net  intangible
assets at September 30, 2004 were as follows:

                Patents and proprietary processes    $   136,067
                Accumulated amortization                 129,620
                                                     -----------
                                                     $     6,447
                                                     ===========

Amortization  expenses  for the  Company's  intangible  assets  over the  future
periods  are  estimated  to  be:  Twelve  months  period  ended   September  30,
2005-$6,447.

5.       EMPLOYEE RECEIVABLES

                 Notes receivable from employees, unsecured,
                    due on June 30, 2019, interest at 4%         $ 377,649

                 Interest receivable in connection with
                    above notes receivable                          18,385
                                                                 ---------
                                                                   396,034
                 Valuation allowance                              (393,208)
                                                                 ---------
                                                                 $   2,826
                                                                 =========

                                      F-38


                              QUINTEK TECHNOLOGIES,
                        NOTES TO THE FINANCIAL STATEMENTS
                                   (Unaudited)

6.      FACTORING PAYABLE

The  Company has  entered  into an  agreement  with a  factoring  company  ("the
Factor") to factor  purchase  orders with recourse.  The Factor funds 97% or 90%
based upon the status of the purchase  order.  The Factor has agreed to purchase
up to $4,800,000 of qualified  purchase  orders over the term of the  agreement;
however,  the Factor does not have to purchase  more than  $200,000 in any given
month. The agreement term is from June 2, 2003 to June 2, 2005. The Company will
pay a late fee of 3% for  payments  not made within 30 days and 5% for those not
made in 60 days.  At the  option of the  Factor,  the late fees may be paid with
Company stock. If paid by Company stock,  the stock bid price will be discounted
50% in computing the shares to be issued in payment of the late fee.

The Company has agreed to issue the Factor  1,500,000  warrants  purchasing  the
Company's stock as a fee for the factoring agreement. The stock issued under the
warrants can be purchased at the average  closing price of the  Company's  stock
for the 90 days prior to the factoring agreement.

The Company has also issued the Factor bonus  warrants.  The Factor will receive
two (2) bonus warrants for each dollar of purchase orders  purchased.  The bonus
warrants  will be  exercisable  at the average  closing  price of the  Company's
common  stock for the 90 days  prior to the  purchase  order  transactions  they
represent or a 50% discount to the closing price of the  Company's  stock at the
time  exercised at the option of the Factor.  Both  warrants are for a five year
period.

At September 30, 2004, the Company had a factoring payable balance of $20,000.

7.      PAYROLL TAXES-ASSUMED IN MERGER

The  Company  assumed  $205,618 of payroll  tax  liabilities  in the merger with
Pacific Diagnostic  Technologies,  Inc. The balance was $96,661 at September 30,
2004. The Company is delinquent on payments of these payroll tax liabilities.

8.      LONG TERM PAYABLES



                                                                          
            Leases payable, interest at 7.9% to 20%, due various dates       $ 273,680
             in 2005 to 2008
            Note payable, DFS, interest at 15.99%, due Jun & Jul 2006            2,720
            Notes payable, AP conversion, interest at 8%, due 2006              44,208
            Note payable - Vendor, monthly installments $404, July 2005          4,045

                                                                               324,653
            Current portion                                                    136,562
                                                                             $ 188,091

            The future maturity of the long term payables is as follows:

                                                     2005                    $ 136,562
                                                     2006                      110,699
                                                     2007                       77,392
                                                     Total                   $ 324,653
                                                                             =========


                                      F-39


                              QUINTEK TECHNOLOGIES,
                        NOTES TO THE FINANCIAL STATEMENTS
                                   (Unaudited)


9.          CONVERTIBLE BONDS


                                                                           
         Bonds payable with interest at 9%, due on various
         dates in 2001 and 2002, convertible to shares of
         Common stock in increments of $1,000 or more.                        $ 21,354

         Bonds  payable  with  interest at 12%,  due July 2002,
         convertible to shares of common stock in increments
         of $500 or more.                                                       41,141
                                                                              --------
                                                                             $  62,495
                                                                             =========


Certain of the  outstanding  convertible  bonds have  matured as of December 31,
2002.  The holders of the matured  bonds do not wish to renew the bonds and have
asked for  payment;  however,  the Company does not have the cash to repay these
bonds.

Bondholders  have been asked to  exchange  their  bonds for  Series B  preferred
stock.  As of  September  30, 2004,  holders of $198,000 of the bonds  including
accrued  interest had acted on this.  The $198,000 is included in the  liability
section of the financials under "Liabilities in Process of Conversion to Stock,"
since the preferred stock has not been issued.

10.        CONVERTIBLE DEBENTURES

During the period ended  September 30, 2004, the Company raised capital  through
the issuance of convertible debentures in the amount of $325,000.

One debenture in the amount of $300,000  pays  interest at 5 3/4%  interests and
includes 3,000,000 warrants to purchase common stock for a period of three years
at $1.00.  The "Conversion  Price" shall be equal to the lesser of (i) $0.50, or
(ii) 80% of the average of the 5 lowest Volume  Weighted  Average  Prices during
the 20 Trading Days prior to Holder's  election to convert,  or (iii) 80% of the
Volume Weighted  Average Price on the Trading Day prior to Holder's  election to
convert  market price of the Company's  common stock prior to  conversion.  Upon
conversion of the debenture,  the fund is obligated to  simultaneously  exercise
the $1.00 warrants  providing added funding to the company.  The Warrant must be
exercised  concurrently with the conversion of this Debenture in an amount equal
to ten times the dollar amount of the Debenture  conversion.  Upon  execution of
the securities  purchase  agreement,  $225,000 of the purchase price was due and
paid to the Company.  The remaining  $75,000 is due the Company upon declaration
from the Securities and Exchange Commission that the Registration  Statement for
the conversion shares and warrants is effective.

A second agreement consists of 2 convertible  debentures each for $100,000 which
bears simple  interest at 10%. The initial  Debenture for $100,000 was purchased
during August 2004. The second  Debenture for $100,000 will be purchased  within
five days of a  registration  statement  being declared  effective  covering the
Conversion Shares and Warrant Shares. Debentures are convertible into the Common
stock of the Company. Conversion Price per share shall be the lower of (i) $0.10
("Maximum  Base  Price");  or (ii) in the  event  the  Borrower  enters  into an
agreement  subsequent to execution of the Securities  Purchase Agreement to sell
Common Stock or a convertible  instrument  that converts into Common Stock prior
to conversion  of this  Debenture at a price less than the  Conversion  Price of
this Debenture, then the Conversion Price of this Debenture shall be immediately
reset to a lower  Conversion  Price equal to that  described  in the  subsequent
agreement.  Warrants are exercisable at $0.12 per share into the Common Stock of
the Company and expire on August 17, 2007.

                                      F-40


                              QUINTEK TECHNOLOGIES,
                        NOTES TO THE FINANCIAL STATEMENTS
                                   (Unaudited)

The  conversion  right of the  debenture  holder with respect to the  individual
debentures   shall  only  exist  upon  the  Company's   registration   statement
registering  the Shares  underlying the debentures  and other  Securities  being
declared  effective by the Securities and Exchange  Commission.  As of September
30, 2004, the criteria to convert the debentures to common stock were not met.

The  total  interest  on  these  convertible  debentures  for the  period  ended
September 30, 2004 amounted to $3,326.

11.         CONVERTIBLE NOTES

During the year ended June 30,  2004,  the Company  raised  capital  through the
issuance of  convertible  promissory  notes in the amount of  $500,000.  All the
notes are for a one year period and bear simple interest at the rate of 10%. The
due dates of these notes are from November 26, 2004 through June 4, 2005.

The  notes  plus  any  accrued  interest  through  the  date of  conversion  are
convertible to the common stock of the Company at $.06. Additionally, the holder
will receive one bonus  warrant for each  conversion  share.  Each bonus warrant
will be  exercisable  for a period of 5 years from the date of issuance into one
share of common stock at a price of $.10.

 The conversion  right of the note holder with respect to the  individual  notes
shall only exist upon:  (i) the  approval of a proxy  statement to be filed with
the  Securities  and  Exchange  Commission  and  approval of an amendment by the
Company's  shareholders  to  authorize  to  200,000,000  the number of shares of
common  stock and (ii) the  Company's  registration  statement  registering  the
Shares underlying the notes and other Securities has been declared  effective by
the Securities and Exchange  Commission.  As of September 30, 2004, the criteria
to convert the notes to common stock were not met.

The total interest on these  convertible notes for the period September 30, 2004
amounted to $12,500.

12.        LIABILITIES IN PROCESS OF CONVERSION TO STOCK

The Company  has a total of $470,629  liabilities  in process of  conversion  to
stock as of September 30, 2004. This amount consists of the following:

                  Bond payable                              $ 198,268
                  Accounts payable                             20,147
                  Payrolls payable                            252,214
                                                            ---------
                                                            $ 470,629
                                                            =========

Bonds for $188,268 are  convertible to one share of Series A Preferred stock for
each $.05 of debt owed by the Company.  Remaining $10,000 bond is convertible to
one share of Series B Preferred stock for each $.25 of debt owed by the Company.

Accounts  payable are  convertible to one share of Series C Preferred  stock for
each $1.00 of payable owed by the Company.

Payrolls  payable are  convertible to one share of Series A Preferred  stock for
each $.25 of debt owed by the Company.

                                      F-41


                              QUINTEK TECHNOLOGIES,
                        NOTES TO THE FINANCIAL STATEMENTS
                                   (Unaudited)

14.       LOANS PAYABLE - STOCKHOLDERS

The  Company  has a loan  payable  balance  of $32,300  to the  stockholders  at
September 30, 2004. These loans are interest free, unsecured and due on demand.

15.      STOCKHOLDERS' EQUITY

a.       Common Stock and Warrants

The Company has authorized 50 million shares of common stock with a par value of
$0.001  per  share.  Each share  entitles  the holder to one vote.  There are no
dividend or liquidation preferences, participation rights, call prices or rates,
sinking  fund  requirements,  or unusual  voting  rights  associated  with these
shares. During the year ended June 30, 2003, the Company established the Class L
warrants and initiated the process of  establishing  the Class A Preferred stock
which underlies these warrants.

During the period ended  September 30, 2004,  2,043,888,  shares of common stock
were issued for services valued at $170,000.

During the period ended  September  30, 2004,  4,682,572  shares of common stock
were issued for conversion of loans from shareholders bond amounting $211,756.

During the period ended  September 30, 2004,  $70,000 of outstanding  notes were
converted  to  700,000  shares  of  common  stock.   In  connection   with  this
transaction, $28,297 of beneficial conversion feature expense was recorded.

On  September  15,  2004,  the  Company  agreed to issue and sell to an Investor
1,000,000  shares of the  Company's  Common  Stock and  warrants  purchase up to
1,000,000  shares of Common  Stock.  The  investor  purchased  from the  Company
1,000,000  shares of Common  Stock of the  Company  for $.10 per  share,  for an
aggregate  of  $100,000,  and also  received  from the Company  (a)  warrants to
purchase up to 1,000,000 shares of Common Stock of the Company at $.13 per share
at any time through September 15, 2007.

The Company  agreed to provide  with  respect to the Common Stock as well as the
Common Stock issuable upon exercise of the Warrants certain  registration rights
under the Securities Act;


Upon  surrender  of either a Class J or L  warrant,  the holder is  entitled  to
purchase one share of the Company's stock at the designated  exercise price. For
each warrant class, the number of warrants outstanding,  the exercise price, the
type of underlying stock, and the expiration dates are defined as follows:

Class L - warrants were  established  in March 2003,  with an exercise  price of
$.25 per share, an expiration date of January 14, 2005 and Series A Preferred as
underlying  stock.  As of June 30,  2004,  holders  of Class J  exchanged  their
warrants for 3,063,432 Class L Warrants.

                                      F-42


                              QUINTEK TECHNOLOGIES,
                        NOTES TO THE FINANCIAL STATEMENTS
                                   (Unaudited)


During the year ended June 30, 2004,  200,000 shares of warrants were issued for
consulting  services for three years beginning February 2004, valued at $41,572.
$3,464 was amortized  during the period ended September 30, 2004. The fair value
of the warrants is estimated  on the grant date using the  Black-Scholes  Model.
The following assumptions were made in estimating fair value.

Annual rate of quarterly dividends                            0.00%
Discount rate - Bond Equivalent Yield                         3.50%
Expected life                                               3 years
Expected volatility                                            100%

       b.    Common Stock Reserved

At September 30, 2004, common stock was reserved for the following reasons:

        Outstanding convertible bond                     151,919 shares
        Exercise of Class L warrants                   3,063,432 shares


             Warrants
                                                        Number
                                                          of
                                                        Warrants
                                                        --------


         Outstanding June 30, 2004                     3,263,432
         Issued during the period                      1,000,000
         Exercised                                             0
                                                       ---------
         Outstanding September 30, 2004                4,263,432
                                                       =========

       c.    Stock Option Agreements

The Company granted 50,000 stock options to one employee during the period ended
September 30, 2004.

The  Company  recorded $ 1,500 as  compensation  expense  due to issuance of the
options, during the period ended September 30, 2004.

The number  and  weighted  average  exercise  prices of  options  granted by the
Company are as follows:

              Options

                                                       Number
                                                         of
                                                       Options
                                                       --------
         Outstanding June 30, 2004                     2,215,000
         Granted during the period                        50,000
         Exercised                                             0
         Expired/forfeited                                     0
                                                       ---------
         Outstanding September 30, 2004                2,265,000

                                      F-43


                              QUINTEK TECHNOLOGIES,
                        NOTES TO THE FINANCIAL STATEMENTS
                                   (Unaudited)

In  December  2002,  the FASB issued  SFAS No. 148  "Accounting  for Stock Based
Compensation-Transition  and  Disclosure".  SFAS No.  148 amends  SFAS No.  123,
"Accounting for Stock Based  Compensation",  to provide  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 Statement 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.  The Statement is effective for the Companies' interim reporting period
ending January 31, 2003.

In  compliance  with FAS No. 148,  the Company has elected to continue to follow
the  intrinsic  value  method  in  accounting  for  its   stock-based   employee
compensation  plan  as  defined  by APB  No.  25 and  has  made  the  applicable
disclosures below.

Had the Company  determined  employee stock based  compensation  cost based on a
fair value  model at the grant date for its stock  options  under SFAS 123,  the
Company's  net  earnings  per share  would have been  adjusted  to the pro forma
amounts for the six month ended June 30, 2004 as follows ($ in thousands, except
per share amounts). :


            Net loss - as reported                    $      (1198)
            Stock-Based employee compensation
              expense included in reported net
              income, net of tax
                                                                -
            Total stock-based employee
              compensation expense determined
              under fair-value-based method for all
              rewards, net of tax                               (1)
                                                        -------------
            Pro forma net loss                        $     (1,199)
                                                        =============
            Earnings per share:
            Basic, as reported                        $       0.02
            Diluted, as reported                      $       0.02
            Basic, pro forma                          $       0.02
            Diluted, pro forma                        $       0.02

The assumptions  used in calculating the fair value of options granted using the
Black-Scholes option- pricing model are as follows:

                  Expected life (years)                       1  year
                  Risk-free interest rate             1.40% and 3.40%
                  Dividend yield                             0% and 0%
                  Volatility                             45% and 100%

      d. Stock transactions approved by the shareholder's

At the annual meeting of the  shareholders  held June 30, 2004, the shareholders
approved  by a majority  vote to increase to  200,000,000  shares,  no par value
common stock,  and  50,000,000  shares no par value,  preferred  stock which the
corporation  shall have authority to issue. The board of directors is authorized
to divide the  preferred  stock  into any  number of classes or series,  fix the
designation  and  number of  shares  of each  such  series or class and alter or
determine the rights, preferences, privileges and restrictions of each or series
of preferred stock Series A Preferred Stock

                                      F-44


                              QUINTEK TECHNOLOGIES,
                        NOTES TO THE FINANCIAL STATEMENTS
                                   (Unaudited)

The  general  terms of the Series A Preferred  Stock is as follows:  Par value -
$0.00;  Liquidation  Preference  - $0.25 per share plus any  unpaid  accumulated
dividends;  Dividends -  cumulative  annual rate of $0.005 per share when and as
declared by the Board of Directors;  Conversion  Rights - convertible  to common
stock at a 1:1 ratio ;  Redemption  Rights - the Company has the right to redeem
part or all of the  stock  upon 30 days  written  notice  at a rate of $0.25 per
share plus all accumulated and unpaid dividends  thereon at the dividend rate of
$0.005  annually  per share;  Voting  Rights - one vote per share on all matters
requiring  shareholder  vote. At September  30, 2004,  the Company had 2,250,000
shares of Series A Preferred Stock to be issued valued at $360,000.  The Company
has recorded a cumulative dividend of $2,813 for the preferred  stockholders for
the three month period ended September 30, 2004, in the  accompanying  financial
statements.

Series B Preferred Stock

The  general  terms of the Series B Preferred  Stock is as follows:  Par Value -
$0.00;  Liquidation  Preference  - $0.25 per share plus any  unpaid  accumulated
dividends;  Dividends - cumulative  annual rate of $0.0005 per share when and as
declared by the Board of Directors;  Conversion  Rights - convertible  to common
stock at a 1:5 ratio (i.e.  1 share of Series B Preferred  stock is  convertible
into 5 shares of common stock) ;  Redemption  Rights - the Company has the right
to redeem  part or all of the  stock  upon 30 days  written  notice at a rate of
$0.25 per  share  plus all  accumulated  and  unpaid  dividends  thereon  at the
dividend rate of $0.0005 annually per share;  Voting Rights - one vote per share
on all matters requiring shareholder vote.

Series C Preferred Stock

The  general  terms of the Series C Preferred  Stock is as follows:  Par value -
$0.00;  Liquidation  Preference  - $1.00 per share plus any  unpaid  accumulated
dividends;  Dividends  -  cumulative  annual  rate of $.0005  per share  when as
declared by the Board of Directors; Conversion Rights - 1:20 ratio (i.e. 1 share
of  Preferred  Series C stock is  convertible  into 20 shares of common  stock);
Redemption Rights - the Company has the right to redeem part or all of the stock
upon 30 days written notice at the rate of $1.00 per share plus all  accumulated
and unpaid dividends thereon at the dividend rate of $.0005 annually per share.;
Voting Rights - one vote per share on all matters requiring shareholder vote.

Liabilities in process of conversion to stock:

The Company has entered into  agreements  with various  vendors and employees to
convert  their  liabilities  into the  above,  three  preferred  series of stock
pending approval of same. The conversion rate varies. (note 12)

17.   SUPPLEMENTAL DISCLOSURE OF CASH FLOWS

The Company  prepares its statements of cash flows using the indirect  method as
defined under the Financial Accounting Standard No. 95.

The Company paid $-0- for income tax during the period ended September 30, 2004.
The Company paid $9,754 interest during the period ended June 30, 2004.

                                      F-45


                              QUINTEK TECHNOLOGIES,
                        NOTES TO THE FINANCIAL STATEMENTS
                                   (Unaudited)

The cash flow  statement for the period ended ended  September 30, 2004 does not
include the following non-cash investing and financing transactions;

         o    4,682,572  shares of common  stock were issued for  conversion  of
              loans from stockholders amounting to $211,756.
         o    Machinery and equipment was acquired through financing  agreements
              in the amount of $223,242.
         o    1,145,595  of shares of a publicly  held entity were  purchased in
              exchange for 14,000,000  shares of the Company's common stock. The
              shares received were valued at $2,660,000.  Of this amount 572,798
              are trading shares, the remaining 572,797 shares are being held in
              escrow.

18.    COMMITMENTS AND CONTINGENCIES

a)    Operating Leases
Effective July 1, 2004 the Company relocated its executive offices to Huntington
Beach,  California and entered into a four year lease  agreement.  The agreement
contains a base rent  escalation  clause.  The Company  leases its Idaho  office
facility under a  month-to-month  rental  agreement at $1,384 per month. For the
period  ended June 30, 2004 rent  expense  for these  operating  leases  totaled
$29,711.


The future minimum lease payments under non-cancelable leases are as follows:

                       2005                  $  79,000
                       2006                     81,000
                       2007                     83,000
                       2008                     64,000
                                             ---------
                                             $ 307,000
                                             =========

The Company has not filed income tax returns for several years. Due to operating
losses,  income tax liability and penalties would not be  substantial.  However,
the State of California could  potentially  revoke the Company's  charter if the
Company does not become current on its income tax return filings.

d)    Securities and Exchange Commission Inquiry

On  September  17,  2002,  the  Company  was  advised  by the  staff of the U.S.
Securities and Exchange  Commission that they will recommend that the Commission
file civil injunctive

Lawsuits against the Company and its president,  Thomas W. Sims. The suits would
allege that the Company violated Section 17(a) of the Securities Act of 1933 and
Sections 10(b) and 13(a) of the Securities Exchange Act of 1934 and Rules 10b-5,
13a-1,  and 13a-13,  based on false and misleading  statements in press releases
disseminated by the Company on October 22, 2001 and October 25, 2001,  regarding
the Company's investment in PanaMed Corp. and the press releases disseminated on
January  8, 2002 and March 20,  2002,  and  failure  to timely  file  annual and
quarterly  reports with the  Commission.  On March 25, 2003, the Company signed,
without admitting or denying the allegations,  a proposed  settlement  agreement
with the U.S. Securities and Exchange  Commission,  which permanently  restrains

                                      F-46


                              QUINTEK TECHNOLOGIES,
                        NOTES TO THE FINANCIAL STATEMENTS
                                   (Unaudited)

and enjoins the Company from engaging in acts which would constitute  violations
of these  regulations  in the future.  On August 6, 2003,  a final  judgment was
entered by the U.S. District Court, Central District of California,  against the
Company which  permanently  enjoined the Company from violating Section 10(b) of
the Exchange  Act and Rule 10b-5  promulgated  thereunder  by using any means or
instrumentality  of  interstate  commerce,  or of the mails,  or of any national
securities  exchange:  (A) to employ any device,  scheme or artifice to defraud;
(B) to make any untrue  statement  of a  material  fact or  omitting  to state a
material fact  necessary in order to make the  statements  made, in the light of
the circumstances  under which they were made, not misleading;  or (C) to engage
in any act, practice, or course of business which operates or would operate as a
fraud or deceit upon any person,  in connection with the purchase or sale of any
security.  Further,  the final  judgment  permanently  enjoined the Company from
violating  Section  13(a)  of the  Exchange  Act  and  Rules  13a-1  and  13a-13
promulgated  thereunder,  by failing to file with the  Commission  in accordance
with Commission rules and regulations, information and documents required by the
Commission  to keep current  information  and  documents  required in or with an
application  or  registration  statement  filed  pursuant  to  Section 12 of the
Exchange Act or annual or quarterly reports as the Commission has prescribed.

d)   Litigation

During the year ended  June 30,  2004,  a  creditor  of the  Company  filed suit
against  the  Company  for  $22,662  for goods  provided.  The  Company  filed a
counterclaim in August 2004.

The  $22,662 is  included  in  accounts  payable  and  accrued  expenses  in the
accompanying financial statements.

19.   BASIC AND DILUTED NET LOSS PER SHARE

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

Weighted  average  number of shares used to compute  basic and diluted  loss per
share for the years  ended June 30,  2004 and 2003 are the same since the effect
of dilutive securities is anti-dilutive.

20.    GOING CONCERN

The  accompanying  financial  statements  have been prepared in conformity  with
generally accepted accounting principles,  which contemplate continuation of the
Company as a going concern.  This basis of accounting  contemplates the recovery
of the Company's  assets and the  satisfaction  of its liabilities in the normal
course of  business.  Through  September  30,  2004,  the Company  had  incurred
cumulative losses of $24,256,306 including net losses of $1,198,053 and $113,709
for the periods ended September 30, 2004 and 2003  respectively.  In view of the
matters described in the preceding paragraph,  recoverability of a major portion
of the  recorded  asset  amounts  shown  in the  accompanying  balance  sheet is
dependent upon continued  operations of the Company,  which in turn is dependent

                                      F-47


                              QUINTEK TECHNOLOGIES,
                        NOTES TO THE FINANCIAL STATEMENTS
                                   (Unaudited)

upon the Company's ability to raise additional capital,  obtain financing and to
succeed in its future  operations.  The financial  statements do not include any
adjustments  relating to the recoverability and classification of recorded asset
amounts or amounts and  classification  of  liabilities  that might be necessary
should the Company be unable to continue as a going concern.

Management  has taken the following  steps to revise its operating and financial
requirements,  which it believes are  sufficient to provide the Company with the
ability to continue as a going concern.  Management devoted  considerable effort
during the period ended  September 30, 2004,  towards (i)  obtaining  additional
equity  financing (ii)  controlling  of salaries and general and  administrative
expenses  (iii)  management  of  accounts  payable  and (iv)  evaluation  of its
distribution and marketing methods.

21.  SUBSEQUENT EVENTS

During October 2004, the Company converted  various  liabilities and stock based
compensation to shares of stock as follows:


400,000 shares of common stock were issued as repayment of $32,300 in loans from
a stockholder.  As part of the agreement, the Company forgave $6,000 owed to the
Company by the stockholder.

1,008,054  shares of Series A preferred stock were issued as conversion of $252,
213 in back payroll. The Series A preferred stock is convertible to common stock
on a 1:1 basis.

2,250,000  shares of Series A preferred  stock were issued as  compensation  for
services  in the amount of  $340,000.  250,000  shares  valued at  $40,000  were
recorded as shares to be issued during the year ended June 30, 2004.  The series
A preferred stock is convertible to common stock on a 1:1 basis.

724,077 shares of Series A preferred stock were issued for a $36,204 convertible
bond.  The series A  preferred  stock is  convertible  to common  stock on a 1:1
basis.

648,255  shares  of  Series B  preferred  stock  were  issued  for  $162,064  in
convertible bonds. The Series B preferred stock is convertible into common stock
on a 1:5 basis.  One share of Series B  preferred  stock is  convertible  into 5
shares of common stock.

32,000  shares of Series B  preferred  stock and  175,000  of common  stock were
issued  to  satisfy  a past  due  agreement.  The  Series B  preferred  stock is
convertible  into common  stock on a 1:5 basis.  One share of Series B preferred
stock is convertible into 5 shares of common stock.

20,148  shares of Series C preferred  stock were issued in conversion of $20,148
in accounts  payable.  The Series C preferred  stock is convertible  into common
stock on a 1:20 basis. One share of Series C preferred stock is convertible into
20 shares of common stock.

                                      F-48


                                       
                                     PART II

                     INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

         Our By-laws,  as amended,  provide to the fullest  extent  permitted by
California  law, our directors or officers shall not be personally  liable to us
or our  shareholders  for damages  for breach of such  director's  or  officer's
fiduciary duty. The effect of this provision of our By-laws,  as amended,  is to
eliminate our right and our shareholders (through shareholders' derivative suits
on behalf of our company) to recover  damages  against a director or officer for
breach  of the  fiduciary  duty of  care as a  director  or  officer  (including
breaches resulting from negligent or grossly negligent  behavior),  except under
certain  situations  defined by  statute.  We believe  that the  indemnification
provisions  in our  By-laws,  as amended,  are  necessary  to attract and retain
qualified persons as directors and officers.

         Insofar as indemnification for liabilities arising under the Securities
Act of 1933 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
Securities 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  Securities
Act and will be governed by the final adjudication of such issue.

ITEM 25. 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                       $   1,999.58
Accounting fees and expenses                  20,000.00*
Legal fees and expenses                       35,000.00*
Miscellaneous                                  5,000.00
                                           ------------
                                    TOTAL    $61,999.58*
                                            ============

* Estimated.


                                      II-1


ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES.

         In October and December 2001, we issued a total of 1,025,000  shares of
restricted  common  stock  at an  average  rate  of  $0.064  per  share  to  two
individuals  and three  companies  as  compensation  for  consulting,  corporate
promotion,   corporate  development,   and  investor  relation  services.  These
issuances  were  exempt  from  registration  pursuant  to  Section  4(2)  of the
Securities Act.


         In October,  November and December  2001, we sold  3,250,000  shares of
restricted  common  stock  at an  average  price  of  $0.043  per  share to four
individuals.  These issuances were exempt from registration  pursuant to Section
4(2) of the Securities Act.


         In November and December  2001 we issued  20,000  shares of  restricted
common stock at an average rate of $0.076 per share to two individuals as a loan
fee. These issuances were exempt from  registration  pursuant to Section 4(2) of
the Securities Act.


         In October  2001 we  executed a stock swap with  PanaMed,  Inc in which
2,000,000 shares of PanaMed  restricted common stock was exchanged for 2,000,000
shares of Quintek restricted common stock.

         On January 8, 2002, we sold 360,000  shares of restricted  common stock
at an average price of $0.05 per share to three  individuals  in reliance on the
exemption  contained in Section 4(2) of the  Securities Act of 1933, for a total
consideration  of  $23,000.  The  closing  price of our common  stock on the OTC
Bulletin Board on the day these shares were sold was $0.21 per share.

         We entered a special agreement,  executed by the purchaser on March 15,
2002,  to sell  105,000  shares  of our  common  stock to one  company  upon the
exercise of warrants. The agreement allowed a reduction of the exercise price to
$0.10 per share under the condition  that they  exercise the warrants  within 60
days and that they  purchase  an equal  number of  shares of  restricted  common
stock, if requested by us within 120 days, at the price of $0.06 per share.  The
closing  price of our common stock on the OTC Bulletin  Board on March 15, 2002,
was $0.18 per share.  On March 19, 2002,  we sold 54,477  shares of stock to the
purchaser for $5,447 upon the exercise of Class D warrants under this agreement.
The closing  price of our common stock on March 19,  2002,  was $0.18 per share.
The purchaser exercised the remainder of the warrants at the reduced,  $0.10 per
share price, after the close of the quarter.  These Class D warrants  originally
had  been  issued  as part of the  plan of  reorganization  of our  predecessor,
Pacific  Diagnostics  Technologies,  Inc.,  in 1999,  and the  stock  issued  on
exercise of the warrants was issued in reliance on the exemption  from contained
in Section 1145 of the U.S. Bankruptcy Code.

         In June  2002 we  issued  689,000  shares  of  restricted  stock to one
individual  and one company as finder  fees.  These  issuances  were exempt from
registration pursuant to Section 4(2) of the Securities Act.

         In April  2002 we  issued  51,462  shares  of  restricted  stock to one
individual in a transaction  based on converting his convertible bond into stock
at a rate of $0.22 per share.

         In April and May 2002 we sold 2,805,000  shares of restricted  stock to
16 individuals and one company at a price of $0.05 per share.

         In April and May 2002 we issued  50,523 shares of free trading stock to
one individual at a rate of $0.10 per share in transactions  based on exercising
Class B, C and D, warrants under an agreement.

                                      II-2


         Subsequent to June 30, 2002 we sold 333,333 shares of restricted  stock
to an  individual  at a rate of  $0.03  per  share,  issued  416,667  shares  of
restricted stock to two individuals for consulting services,  and issued 224,000
shares of restricted stock to an individual in a transaction based on converting
his convertible bond into stock at a rate of $0.05 per share.

         In September 2002, we issued 167,667 shares of restricted  common stock
to one individual for consulting services in reliance on the exemption contained
in Section 4(2) of the  Securities  Act of 1933. The closing price of our common
stock on the OTC Bulletin  Board on the contract date  (September  12, 2002) was
$0.06 per share.

         In September 2002, we sold 333,333 shares of restricted common stock at
a price of $0.03  per  share to one  individual  in  reliance  on the  exemption
contained  in  Section  4(2)  of  the  Securities  Act  of  1933,  for  a  total
consideration  of  $10,000.  The  closing  price of our common  stock on the OTC
Bulletin Board on the sale date (September 12, 2002) was $0.06 per share.

         In September 2002, we issued 224,000 shares of restricted  common stock
to one individual in reliance on the exemption  contained in Section 4(2) of the
Securities  Act of 1933,  for a total  consideration  of $11,200.  The stock was
issued as  consideration  for  converting  a  convertible  bond into stock.  The
closing price of our common stock on the OTC Bulletin  Board on the day the bond
was sold (July 11, 2001) was $0.06 per share.

         In October 2002, we issued 250,000 shares of restricted common stock to
1 individual for consulting  services in reliance on the exemption  contained in
Section  4(2) of the  Securities  Act of 1933.  The closing  price of our common
stock on the OTC Bulletin Board on the contract date (October 1, 2002) was $0.06
per share.

         In October 2002, we issued 200,000 shares of restricted common stock to
one individual and 200,000 shares of restricted  common stock to one company for
consulting  services in reliance on the  exemption  contained in Section 4(2) of
the  Securities  Actof 1933.  The closing  price of our common  stock on the OTC
Bulletin Board on the contract date (September 3, 2002) was $0.04 per share.

         In October 2002, we issued 150,000 shares of restricted common stock to
one company for  consulting  services in reliance on the exemption  contained in
Section  4(2) of the  Securities  Act of 1933.  The closing  price of our common
stock on the OTC Bulletin  Board on the contract  date (March 1, 2002) was $0.19
per share.

            In October 2002, we issued 250,000 shares of restricted common stock
to one individual for consulting services in reliance on the exemption contained
in Section 4(2) of the Securities Act of 1933.

            In October 2002, we issued 200,000 shares of restricted common stock
to one individual  and 200,000 shares of restricted  common stock to one company
for consulting  services in reliance on the exemption  contained in Section 4(2)
of the Securities Act of 1933.

            In October 2002, we issued 150,000 shares of restricted common stock
to one company for consulting services in reliance on the exemption contained in
Section 4(2) of the Securities Act of 1933.

            In December  2002, we issued  424,000  shares of  restricted  common
stock to two  individuals  and 16,000  shares of  restricted  common  stock to 1
company  for  consulting  services in reliance  on the  exemption  contained  in
Section 4(2) of the Securities Act of 1933.

                                      II-3


            In March 2003, we issued 400,000 shares of stock to Robert Steele as
compensation  for consulting  services  performed  during the months of December
2002 and January 2003,  prior to assuming the position of our President & CEO on
January 31, 2003. In March 2003 these shares were registered with the Securities
and Exchange Commission on Form S-8 of the Securities Act of 1933.

            In January 2003, we issued a warrant to purchase 4,500,000 shares of
common  stock,  under  a  special  warrant  agreement,   to  one  individual  as
compensation  for  consulting  services.  The warrant has an exercise price of 2
cents per share,  an expiration date of July 31, 2003, and a requirement for the
underlying stock to be registered on Form S-8 of the Securities Act of 1933.

            In March 2003,  we issued  4,500,000  shares of common  stock to one
individual upon exercise of the warrants  described in Item 2 (B) for $90,000 in
cash.  The common stock was  subsequently  registered  with the  Securities  and
Exchange Commission on Form S-8 of the Securities Act of 1933.

            On September 26, 2003, we sold to a single accredited investor, five
convertible notes, each for $100,000 for a total purchase price of $500,000. The
convertible  notes bear interest at 10% per annum.  These notes are  convertible
into shares of our common  stock at a price of $0.06.  In  connection  with this
Note  Purchase  Agreement,  the investor  will receive up to 9,166,667  warrants
exercisable  at $0.10 per share and  expiring on September  26,  2008,  with the
investor  receiving one warrant for every share  converted under the convertible
notes.

            In October  2003 we issued  1,773,695  shares of  restricted  common
stock to one  individual  in  return  for  converting  to equity  the  principal
($89,200) and accrued interest  ($17,222) of a convertible bond. The convertible
bond had been held for over 2 years and this  caused  the  shares  issued on the
principal  amount to become  immediately  eligible for legend removal under Rule
144(k).

            In October 2003 we issued 14,291  shares of restricted  common stock
to one  individual  as a late fee  incurred  during a purchase  order  financing
transaction. The stock had a market value of $1,372.

         To satisfy stock purchase agreement totaling $1,946,000, Quintek issued
14,000,000 shares of common stock at $0.139.

         We issued  1,500,000 shares of common stock to two entities in exchange
for $105,000.

         On July 11, 2004, we sold a $20,000  convertible  promissory  note, 10%
interest per annum,  to an  accredited  investor.  The note is due one year from
issuance.  On August 31, 2004,  the note was  converted  into 200,000  shares of
common stock at $0.10.  Additionally,  the investor was granted,  for each share
converted  pursuant to the note, one warrant to purchase a share of common stock
at $0.15, expiring July 1, 2007.

         On July 15,  2004,  we  issued  300,000  shares  of  common  stock to a
consultant  in  consideration  of $45,000 of  services  performed  pursuant to a
consulting agreement.

         On July 17, 2004, we sold a $100,000  convertible  promissory note, 10%
interest per annum,  to an  accredited  investor.  The note is due one year from
issuance.  The note is  convertible  into  1,000,000  shares of common  stock at
$0.10. Additionally, the investor was granted, for each share converted pursuant
to the note, one warrant to purchase a share of common stock at $0.15,  expiring
July 17, 2007.

                                      II-4


         On July 27, 2004, we sold a $50,000  convertible  promissory  note, 10%
interest per annum,  to an  accredited  investor.  The note is due one year from
issuance.  On August 31, 2004,  the note was  converted  into 500,000  shares of
common stock at $0.10.  Additionally,  the investor was granted,  for each share
converted  pursuant to the note, one warrant to purchase a share of common stock
at $0.15, expiring July 27, 2007.

         On July 29,  2004,  we entered  into an  Agreement  with  Langley  Park
Investments PLC, a London  investment  company to issue 14,000,000 shares of our
common  stock to Langley  Park  Investments  in return for  1,145,595  shares of
Langley.  Fifty  percent of Langley Park  Investments  shares issued to us under
this agreement are to be held in escrow for two years.  At the end of two years,
if the market price for our common stock at or greater than the initial  closing
price,  the escrow agent will  release the  remaining  Langley Park  Investments
shares to us. In the event  that the market  price for our common  stock is less
than the initial closing price the amount released will be adjusted.

         To  obtain  funding  for our  ongoing  operations,  we  entered  into a
Securities  Purchase Agreement with an accredited investor on August 4, 2004 for
the  sale of (i)  $300,000  in  convertible  debentures  and  (ii)  warrants  to
buy3,000,000  shares of our common stock. This prospectus  relates to the resale
of the common stock underlying these convertible debentures and warrants.

         The investors are obligated to provide us with an aggregate of $300,000
as follows:

         o    $175,000 was disbursed to us on August 4, 2004;
         o    $50,000 has been retained for services  provided to our company by
              various professionals, which shall be disbursed upon effectiveness
              of this registration statement; and
         o    $75,000 will be released upon  effectiveness of this  registration
              statement.

         The debentures bear interest at 5 3/4%,  mature two years from the date
of  issuance,  and  are  convertible  into  our  common  stock,  at the  selling
stockholder's option. The convertible debentures are convertible into the number
of our shares of common stock equal to the  principal  amount of the  debentures
being  converted  multiplied  by 11,  less the product of the  conversion  price
multiplied by ten times the dollar amount of the debenture. The conversion price
for the convertible  debenture is the lesser of (i) $0.50 or (ii) eighty percent
of the of the average of the five lowest volume  weighted  average prices during
the twenty (20) trading  days prior to the  conversion.  If the volume  weighted
average price is below $0.10 on a conversion  date, we have the right to pre-pay
the amount of the  debenture  the holder  elects to  convert,  plus  accrued and
unpaid interest, at 125% of such amount; however, if we elect to pre-pay in this
situation,  the  debenture  holder  has the  right to  withdraw  the  notice  of
conversion.  Also,  if the volume  weighted  average price is below $0.10 at any
point during a month,  the holder is not obligated to convert any portion of the
debenture  during  that  month.  Accordingly,  there  is in fact no limit on the
number of shares into which the  debenture may be  converted.  In addition,  the
selling  stockholder is obligated to exercise the warrant  concurrently with the
submission  of a conversion  notice by the selling  stockholder.  The warrant is
exercisable  into 3,000,000 shares of common stock at an exercise price of $1.00
per share.

         The  selling  stockholder  has  contractually  agreed to  restrict  its
ability to convert or exercise  its  warrants  and receive  shares of our common
stock  such that the  number of  shares of common  stock  held by them and their
affiliates  after such  conversion  or exercise does not exceed 4.9% of the then
issued and outstanding  shares of common stock.  See the "Selling  Stockholders"
and "Risk  Factors"  sections  for a  complete  description  of the  convertible
debentures.

                                      II-5


         In the event that the registration  statement is not declared effective
by the required  deadline,  Golden Gate may demand repayment of the debenture of
150% of the face amount  outstanding,  plus all accrued and unpaid interest,  in
cash. If the repayment is accelerated,  we are also obligated to issue to Golden
Gate  50,000  shares of common  stock and  $15,000  for each 30 day  period,  or
portion  thereof,  during which the face  amount,  including  interest  thereon,
remains  unpaid.  If Golden Gate does not elect to accelerate the debenture,  we
are required to  immediately  issue to Golden Gate 50,000 shares of common stock
and $15,000 for each 30 day period,  or portion  thereof,  during which the face
amount, including interest thereon, remains unpaid.

         On August  5,  2004,  we sold  1,000,000  shares of common  stock to an
accredited investor in consideration of $70,000.

         On August  5,  2004,  we sold  500,000  shares  of  common  stock to an
accredited investor in consideration of $35,000.

         On August  14,  2004,  we issued  302,271  shares of common  stock to a
consultant  in  consideration  of $36,300 of  services  performed  pursuant to a
consulting agreement.

         On August  14,  2004,  we issued  243,888  shares of common  stock to a
consultant  in  consideration  of $30,600 of  services  performed  pursuant to a
consulting agreement.

         We entered  into a Securities  Purchase  Agreement  with an  accredited
investor on August 17, 2004 for the sale of $200,000 in convertible notes.

         The  investor is  obligated to provide us with an aggregate of $200,000
as follows:

         o    $100,000 was disbursed on August 17, 2004; and

         o    $100,000 will be disbursed  within five days of the  effectiveness
              of this prospectus.

         Accordingly,  we have  received  a total of  $100,000  pursuant  to the
Securities Purchase Agreement.

         The  convertible  notes bear interest at 10%, mature two years from the
date of issuance,  and are  convertible  into our common  stock,  at the selling
stockholders'  option,  at $0.10 per  share.  In the event that we enter into an
agreement  subsequent to execution of the Securities  Purchase Agreement to sell
common stock or a convertible  instrument  that converts into Common Stock prior
to  conversion of these  debentures  at a price less than a conversion  price of
$0.10,  then the conversion price of these debentures will reset to the lower of
$0.10 or the lower conversion  price equal to that in the subsequent  agreement.
Warrants are  exercisable at $0.12 into shares of our common stock of and expire
on August 17, 2007.

         On August  26,  2004,  we issued  150,000  shares of common  stock to a
consultant  in  consideration  of $22,500 of  services  performed  pursuant to a
consulting agreement.

         On September 15, 2004, we sold  1,000,000  shares of common stock to an
investor in consideration of $100,000;  additionally, the investor was granted a
warrant to purchase  1,000,000  of common  stock at an exercise  price of $0.13,
expiring on September 15, 2007.

         On September  26, 2004, we issued  230,275  shares of common stock to a
consultant  in  consideration  of $33,200 of  services  performed  pursuant to a
consulting agreement.

                                      II-6


         On September 27, 2004, we issued  648,256  shares of Series B Preferred
Stock to three creditors in consideration of conversion of $162,063.88 in debt.

         On September 27, 2004, we issued  724,077  shares of Series A Preferred
Stock in consideration of conversion of $36,203.84 in debt.

         On September  27, 2004,  we issued  18,981 shares of Series C Preferred
Stock to eleven creditors in consideration of conversion of $18,981.16 in debt.

         On September 27, 2004, we issued 1,006,854 shares of Series A Preferred
Stock to five employees in consideration of conversion of $251,713.50 in debt.

         On September  29, 2004, we issued  700,000  shares of common stock to a
consultant  in  consideration  of $133,000 of services  performed  pursuant to a
consulting agreement.

         On September 30, 2004, we sold 14,000,000  shares of common stock to an
institutional investor at $0.139 per share, for gross proceeds of $1,946,000.

         On  October  4,  2004,  we sold  250,000  shares of common  stock to an
investor in consideration of $25,000;  additionally,  the investor was granted a
three-year  warrant to purchase  250,000  shares of common  stock at an exercise
price of $0.15.

         On October 16, 2004, we sold a $250,000 promissory note, 5.75% interest
per annum, to an accredited investor.  The note is due six months from issuance.
Additionally,  the investor  was granted  5,000,000  warrant to purchase  common
stock at $0.10, expiring October 16, 2007.

         * All of the above  offerings  and sales were deemed to be exempt under
rule 506 of  Regulation D and Section  4(2) of the  Securities  Act of 1933,  as
amended.  No  advertising or general  solicitation  was employed in offering the
securities.  The offerings  and sales were made to a limited  number of persons,
all of whom were accredited investors, business associates of Radix or executive
officers of Quintek,  and transfer was restricted by Quintek in accordance  with
the  requirements of the Securities Act of 1933. In addition to  representations
by the  above-referenced  persons, we have made independent  determinations that
all of the above-referenced  persons were accredited or sophisticated investors,
and  that  they  were  capable  of  analyzing  the  merits  and  risks  of their
investment, and that they understood the speculative nature of their investment.
Furthermore,  all of the  above-referenced  persons were provided with access to
our Securities and Exchange Commission filings.

         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 the Company.


                                      II-7


         ITEM 27. EXHIBITS.

         The  following  exhibits  are  included  as  part of  this  Form  SB-2.
References  to "the  Company" in this Exhibit  List mean  Quintek  Technologies,
Inc., a California corporation.

Exhibit #         Exhibit Name
---------         ------------

3.1               Articles of Incorporation of the Registrant

3.2               Amendment to the Articles of Incorporation

3.3               By-laws of the Registrant,  filed as an exhibit to the current
                  report on Form 8-K filed with the  Commission  on January  14,
                  2004 and incorporated herein by reference.

3.3               Certificate of Designation for Series A Preferred Stock

3.4               Certificate of Designations for Series B Preferred Stock

3.5               Certificate of Designations for Series C Preferred Stock

4.1               Securities  Purchase Agreement dated June 2004 entered between
                  the  Company  and Golden  Gate  Investors,  Inc.,  filed as an
                  exhibit to the amended  annual report on Form  10-KSB/A  filed
                  with the  Commission  on  October  13,  2004 and  incorporated
                  herein by reference.

4.2               Convertible  Debenture  dated August 2004 entered  between the
                  Company and Golden Gate Investors, Inc.

4.3               Warrant to Purchase  Common  Stock dated August 2004 issued to
                  Golden Gate Investors, Inc.

4.4               Registration   Rights  Agreement  dated  August  2004  entered
                  between Golden Gate Investors, Inc. and the Company

4.5               Note Purchase  Agreement  dated November 2003 entered  between
                  the Company and Kazi  Management V.I. LLC, filed as an exhibit
                  to the amended  annual report on Form 10-KSB/A  filed with the
                  Commission  on October  13,  2004 and  incorporated  herein by
                  reference.

4.6               Convertible   Note  I  dated  November  2003  issued  to  Kazi
                  Management V.I. LLC, filed as an exhibit to the amended annual
                  report on Form 10-KSB/A  filed with the  Commission on October
                  13, 2004 and incorporated herein by reference.

4.7               Convertible  Note  II  dated  November  2003  issued  to  Kazi
                  Management V.I. LLC, filed as an exhibit to the amended annual
                  report on Form 10-KSB/A  filed with the  Commission on October
                  13, 2004 and incorporated herein by reference.

4.6               Convertible  Note  III  dated  November  2003  issued  to Kazi
                  Management V.I. LLC, filed as an exhibit to the amended annual
                  report on Form 10-KSB/A  filed with the  Commission on October
                  13, 2004 and incorporated herein by reference.

4.6               Convertible  Note  IV  dated  November  2003  issued  to  Kazi
                  Management V.I. LLC, filed as an exhibit to the amended annual
                  report on Form 10-KSB/A  filed with the  Commission on October
                  13, 2004 and incorporated herein by reference.

                                      II-8


4.7               Convertible   Note  V  dated  November  2003  issued  to  Kazi
                  Management V.I. LLC, filed as an exhibit to the amended annual
                  report on Form 10-KSB/A  filed with the  Commission on October
                  13, 2004 and incorporated herein by reference.

4.8               Common Stock Purchase  Warrant issued to Kazi  Management V.I.
                  LLC,  filed as an exhibit to the amended annual report on Form
                  10-KSB/A  filed with the  Commission  on October  13, 2004 and
                  incorporated herein by reference.

4.9               Loan  and  Security  Agreement  dated  November  2003  entered
                  between the Company and Kazi  Management V.I. LLC, filed as an
                  exhibit to the amended  annual report on Form  10-KSB/A  filed
                  with the  Commission  on  October  13,  2004 and  incorporated
                  herein by reference.

4.10              Registration  Rights  Agreement  dated  November  2003 entered
                  between the Company and Kazi  Management V.I. LLC, filed as an
                  exhibit to the amended  annual report on Form  10-KSB/A  filed
                  with the  Commission  on  October  13,  2004 and  incorporated
                  herein by reference.

4.11              Stock  Purchase  Agreement,  dated July 7, 2004,  between  the
                  Company and Langley Park  Investments PLC, filed as an exhibit
                  to the amended  annual report on Form 10-KSB/A  filed with the
                  Commission  on October  13,  2004 and  incorporated  herein by
                  reference.

5.1               Sichenzia Ross Friedman Ference LLP Opinion and Consent (filed
                  herewith)

10.1              Employment Agreement between the Registrant and Robert Steele,
                  dated  January  31,  2003,  filed as an exhibit to the amended
                  annual  report on Form 10-KSB/A  filed with the  Commission on
                  October 13, 2004 and incorporated herein by reference.

10.2              Employment  Agreement  between the Registrant and Andrew Haag,
                  dated  January  31,  2003,  filed as an  exhibit to the annual
                  report on Form 10-KSB filed with the Commission on October 14,
                  2003 and incorporated herein by reference.

10.3              Employment   Agreement   between  the  Registrant  and  Robert
                  Brownell,  dated January 31, 2003,  filed as an exhibit to the
                  annual  report on Form  10-KSB  filed with the  Commission  on
                  October 14, 2003 and incorporated herein by reference.

10.4              Purchase Order Financing Agreement,  dated as of June 2, 2003,
                  by and between the Company and Kazi  Management VI, LLC, filed
                  as an exhibit to the annual  report on Form 10-KSB  filed with
                  the Commission on October 14, 2003 and incorporated  herein by
                  reference.

14.1              Code of  Ethical  Conduct,  filed as an  exhibit to the annual
                  report on Form 10-KSB filed with the Commission on October 14,
                  2003 and incorporated herein by reference.

14.2              Audit  Committee  Charter,  filed as an  exhibit to the annual
                  report on Form 10-KSB filed with the Commission on October 14,
                  2003 and incorporated herein by reference.

23.1              Consent  of Kabani &  Company,  Inc.,  Independent  Registered
                  Public Accounting Firm
                                      II-9


23.2              Consent  of  Heard,   McElroy  &  Vestal,   LLP,   Independent
                  Registered Public Accounting Firm

23.3              Consent of legal counsel (see Exhibit 5.1)

ITEM 28. UNDERTAKINGS.

The undersigned registrant hereby undertakes to:

(1) File,  during  any  period  in which  offers  or sales  are  being  made,  a
post-effective amendment to this registration statement to:

(i) Include any prospectus required by Section 10(a)(3) of the Securities Act of
1933, as amended (the "Securities Act");

(ii)  Reflect  in the  prospectus  any facts or events  which,  individually  or
together,  represent a fundamental change in the information in the registration
statement.  Notwithstanding the foregoing, any increase or decrease in volume of
securities  offered (if the total dollar value of the  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)  under  the
Securities Act 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) Include any  additional  or changed  material  information  on the plan of
distribution.

(2)  For   determining   liability   under  the   Securities   Act,  treat  each
post-effective  amendment  as a new  registration  statement  of the  securities
offered,  and the offering of the securities at that time to be the initial bona
fide offering.

(3) File a  post-effective  amendment  to remove  from  registration  any of the
securities that remain unsold at the end of the offering.

(4) For purposes of determining  any liability  under the Securities  Act, treat
the  information  omitted  from  the  form of  prospectus  filed as part of this
registration  statement  in reliance  upon Rule 430A and  contained in a form of
prospectus  filed by the registrant  pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act as part of this  registration  statement as of the time
it was declared effective.

(5)  For  determining  any  liability  under  the  Securities  Act,  treat  each
post-effective   amendment   that  contains  a  form  of  prospectus  as  a  new
registration statement for the securities offered in the registration statement,
and that  offering  of the  securities  at that  time as the  initial  bona fide
offering of those securities.

         Insofar as indemnification for liabilities arising under the Securities
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 Securities Act
and is, therefore, unenforceable.

                                     II-10


         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 Securities  Act and will be governed by the final  adjudication
of such issue.




                                     II-11




                                   SIGNATURES

         In accordance with the  requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the  requirements  of filing on Form SB-2 and  authorizes  this  registration
statement  to be  signed  on its  behalf  by the  undersigned,  in the  City  of
Huntington Beach, State of California, on November 22, 2004.

                           QUINTEK TECHNOLOGIES, INC.


By: /s/ ROBERT STEELE
    -----------------------------------------------------
    Robert Steele, President, Chief Executive Officer and
    Director

By: /s/ ANDREW HAAG
    -----------------------------------------------------
    Andrew Haag, Chief Financial Officer and Director

         In accordance with the requirements of the Securities Act of 1933, this
registration statement was signed by the following persons in the capacities and
on the dates stated.





SIGNATURE                                         TITLE                               DATE
---------                                         -----                               ----

                                                                                
/s/ ROBERT STEELE                   Chief Executive Officer and Director             November 22, 2004
--------------------------------
    Robert Steele


/s/ ANDREW HAAG                      Chief Financial Officer and Director            November 22, 2004
--------------------------------
    Andrew Haag





                                     II-12