The Company believes that acquisitions such as GPS add not only expanded product
offerings, but also augment the Company's management capability. The Company
will continue to evaluate acquisition candidates for similar opportunities.
Terms of the purchase agreement between the Company and GPS provide for the
following:
2,000,000 shares of the Company's restricted stock for purchase of 55% of GPS;
o Various performance stock options, up to a maximum of 8,000,000 shares,
exercisable at $.001 per share, over varying periods through 2003.
o GPS commenced operations in early 2000. In 2000, GPS was awarded a
$2,872,047 sole source contract by the U.S. Air Force. Through December
31, 2000, all revenues were from this contract. At December 31, 2000, GPS
is owed $458,273 by the U.S. Air Force.
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