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<SEC-DOCUMENT>0001127855-03-000414.txt : 20030812
<SEC-HEADER>0001127855-03-000414.hdr.sgml : 20030812
<ACCEPTANCE-DATETIME>20030811193146
ACCESSION NUMBER:		0001127855-03-000414
CONFORMED SUBMISSION TYPE:	20-F
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20030430
FILED AS OF DATE:		20030812

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			NET FORCE SYSTEMS INC
		CENTRAL INDEX KEY:			0001084201
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-PREPACKAGED SOFTWARE [7372]
		IRS NUMBER:				000000000
		STATE OF INCORPORATION:			B9
		FISCAL YEAR END:			0430

	FILING VALUES:
		FORM TYPE:		20-F
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-29031
		FILM NUMBER:		03835703

	BUSINESS ADDRESS:	
		STREET 1:		SUITE #10-EPICUREAN, WOODS CENTRE
		STREET 2:		P.O. BOX W-645
		CITY:			ST. JOHN'S
		STATE:			B9
		ZIP:			00000
		BUSINESS PHONE:		(268) 562-3452

	MAIL ADDRESS:	
		STREET 1:		SUITE #10-EPICUREAN, WOODS CENTRE
		STREET 2:		P.O. BOX W-645
		CITY:			ST. JOHN'S
		STATE:			B9
</SEC-HEADER>
<DOCUMENT>
<TYPE>20-F
<SEQUENCE>1
<FILENAME>netforce20f2003.txt
<DESCRIPTION>NET FORCE SYSTEMS 20-F, 2003 ANNUAL REPORT
<TEXT>





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

                                    FORM 20-F

[X]  ANNUAL REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE
     ACT OF 1934 for the year ended April 30, 2003.

                         COMMISSION FILE NUMBER: 0-29031

                             NET-FORCE SYSTEMS INC.
                             ----------------------
                       (Name of Registrant in its charter)

                               ANTIGUA and BARBUDA
                               -------------------
         (State or other jurisdiction of incorporation or organization)

                        Suite #10-Epicurean, Woods Centre
                        ---------------------------------
                                 P.O. Box W-645
                                 --------------
                               St. John's, Antigua
                               -------------------
                                   West Indies
                                   -----------
              (Address of principal executive offices and zip code)

                                 (268) 562-3452
                                 --------------
                           (Issuer's telephone number)

                 Securities registered or to be registered under
                            Section 12(b) of the Act:
                                      NONE
                                      ----
              Securities registered or to be registered pursuant to
                            Section 12(g) of the Act:

        Securities for which there is a reporting obligation pursuant to
                            section 15(d) of the Act:

              Common Stock having a par value of $0.001 per share.

The number of outstanding  shares of each of the issuer's  classes of capital or
common stock as of April 30, 2003 was 17,066,033 Common Stock.

Indicate  by check mark  whether  the  registrant  (1) has filed all the reports
required to be filed by Section 13 or 15(d) of The  Securities  Exchange  Act of
1934 during the preceding 12 months (or such shorter  period that the registrant
was  required  to file such  reports,  and (2) has been  subject to such  filing
requirements for the past 90 days:   [ ] Yes  [X] No

Indicate  by check mark  which  financial  statements  item the  registrant  has
elected to follow:

ITEM 17 [X]   ITEM 18 [ ]



<PAGE>



                             NET FORCE SYTEMS, INC.
- --------------------------------------------------------------------------------


                                TABLE OF CONTENTS
                                -----------------


PART I.......................................................................1

     Introduction............................................................1
     Accounting Periods and Principles.......................................1
     Cautionary Statement Regarding Forward-Looking Information..............1
   ITEM 1.   IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS...........1
   ITEM 2.   OFFER STATISTICS AND EXPECTED TIMETABLE.........................1
   ITEM 3.   KEY INFORMATION.................................................1
     A.   NET FORCE SYSTEMS INC. SELECTED FINANCIAL DATA.....................1
     B.   RISKS RELATED TO THE BUSINESS......................................2
     Risks Related to the Industry...........................................5
     Risks Related to Securities Market......................................7
   ITEM 4.   INFORMATION ON THE COMPANY......................................8
     A.   BUSINESS...........................................................8
     Business Development....................................................8
     B.   Business of the Issuer............................................10
     C.   Business and Marketing Strategies.................................11
     D.   The Company's Services and Products...............................12
     E.   Marketing.........................................................14
     F.   INDUSTRY OVERVIEW.................................................15
     G.   Internet Gambling Industry........................................17
     H.   International Outlook on Internet Gaming..........................18
     I.   Competition.......................................................19
     J.   Description of Property...........................................19
     K.   Government Regulation.............................................20
     L.   Current Internet Gambling Enforcement.............................22
   ITEM 5.  OPERATING AND FINANCIAL REVIEW AND PROSPECTS....................22
     Forward Looking Statements.............................................22
     Plan of Operations.....................................................23
     Balance Sheet Data.....................................................27
   ITEM 6.   DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES.....................28
     Directors and Senior Management........................................28
   ITEM 7.   MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS..............32
     Related Party Transactions.............................................33
   ITEM 8.   FINANCIAL INFORMATION..........................................34
   ITEM 9.   THE OFFER AND LISTING..........................................34
   ITEM 10.  ADDITIONAL INFORMATION.........................................34
   ITEM 11.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK......39
   ITEM 12.  DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES.........39

PART II.....................................................................39

   ITEM 13.  DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES................39
   ITEM 14.  MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS
             AND USE OF PROCEEDS............................................39

PART III....................................................................40

   ITEM 17.  FINANCIAL STATEMENTS...........................................40
   ITEM 18.  FINANCIAL STATEMENTS...........................................40
   ITEM 19.  EXHIBITS.......................................................40
   SIGNATURES...............................................................40
   CERTIFICATIONS*..........................................................41
   EXHIBIT 99.1.............................................................42
   SCHEDULE "A" - CONSOLIDATED FINANCIAL STATEMENTS.........................43





- --------------------------------------------------------------------------------
Annual Report - 2003                                                  Page i
<PAGE>



                             NET FORCE SYTEMS, INC.
- --------------------------------------------------------------------------------

PART I
- ------

Introduction
- ------------

This annual report on Form 20-F relates to the common shares of Net Force
Systems Inc. a corporation registered to carry on business in Antigua.

In this annual report, except as otherwise indicated or as the context otherwise
requires, the "Company", "we", "us" and "our" refers to Net Force Systems Inc.


Accounting Periods and Principles
- ---------------------------------

We have prepared our audited annual consolidated financial statements as of
April 30, 2003 and for the previous two years in U.S. dollars in accordance with
United States generally accepted accounting principles (U.S. GAAP).

Percentages and some amounts in this annual report have been rounded for ease of
presentation. Any discrepancies between totals and the sums of the amounts
listed are due to rounding.


Cautionary Statement Regarding Forward-Looking Information
- ----------------------------------------------------------

Net-Force Systems Inc. (the "Company" or "Net-Force") cautions readers that
certain important factors (including without limitation those set forth in this
Form 20-F) may affect the Company's actual results and could cause such results
to differ materially from any forward-looking statements that may be deemed to
have been made in this Form 20-F annual return, or that are otherwise made by or
on behalf of the Company. For this purpose, any statements contained in the
annual return that are not statements of historical fact may be deemed to be
forward-looking statements. Without limiting the generality of the foregoing,
words such as "may", "expect", believe", "anticipate", "intend", "could",
"estimate" or "continue" or the negative or other variations of comparable
terminology, are intended to identify forward-looking statements.


ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
- -------------------------------------------------------------

Not Applicable.


ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE
- -----------------------------------------------

Not Applicable.


ITEM 3. KEY INFORMATION
- -----------------------

A. NET FORCE SYSTEMS INC. SELECTED FINANCIAL DATA
- -------------------------------------------------


The following financial information of our company is only a summary and should
be read in conjunction with, and is qualified in its entirety by reference to,
the audited annual consolidated financial statements of our company and the
related notes which are included in this annual report.

We selected historical financial data set forth below as of and for each of the
years ended April 30, 2003, 2002, and 2001 have been derived from our
consolidated financial statements, which have been audited by HJ & Associates
LLC, Certified Public Accountants, Salt Lake City, Utah, USA, independent
accountants. We only represent these particular years because the Company
commenced operations subsequent to April 30, 1999 even though it was
incorporated and in good standing as of March 1, 1999. Our financial statements
have been prepared in U.S. dollars in accordance with U.S. GAAP.


- --------------------------------------------------------------------------------
Annual Report - 2003                                                  Page 1
<PAGE>



                             NET FORCE SYTEMS, INC.
- --------------------------------------------------------------------------------

Our U.S. GAAP audited annual consolidated financial statements as of April 30,
2003, 2002, and 2001 are included in this annual report.

The following is a summary of the discontinued operations for the years ended
April 30, 2003, 2002, and 2001. See Note 11 - Subsequent Events, of the
Consolidated Financial Statements for a summary of the Discontinued Operations
for the years ended April 30, 2003, 2002.

                                    2003             2002            2001
                                    ----             ----            ----
Income                         $    288,613     $    519,237    $    318,490
Cost of Sales                      (212,445)        (282,020)       (217,769)
Gross Profit                         76,168          237,217         100,721
Net Loss From Operations           (126,302)        (140,552)       (406,798)
Net Loss                           (125,564)        (174,206)       (484,597)
Net (loss) per common share           (0.01)           (0.01)          (0.07)
Total Assets                        130,157          236,254         269,194
Total Shareholders Equity           (26,123)          99,441        (682,956)
Common Stock                         17,066           17,066           7,500
Paid-in Capital                   1,145,037        1,145,037         198,000
No. of Shares                    17,066,033       17,066,033       7,500,000
Dividend Declared per Share               -                -               -
Net Income (Loss) per Share          (0.01)             (.01)           (.07)


B. RISKS RELATED TO THE BUSINESS
- --------------------------------

As of June 3, 2003, we have disposed of our operating subsidiary and re-entered
- -------------------------------------------------------------------------------
the development stage as a company. Therefore, we cannot guarantee our
- ----------------------------------------------------------------------
profitability.
- --------------

The Company was recently formed in the year 2000 and has limited operating
history. Since incorporation, the Company has expended resources on technology,
license fees, website development, hiring of personnel and startup costs. As a
result, losses were incurred since incorporation and management expects to
experience operating losses and negative cash flow for the foreseeable future.
We anticipate losses will continue to increase from current levels because we
expect to incur additional costs and expenses related to: brand development,
marketing and other promotional activities; the addition of customer service
personnel; the continued development of the websites; the expansion of service
offerings and website content; and development of relationships with strategic
business partners. Current losses to date for the 12 month period ended April
30, 2002 are $(125,564). Cumulative Losses from inception at March 1, 1999 to
date to April 30, 2003 are $(1,188,226).

There can be no assurance at this time that we will operate profitably or that
we will have adequate working capital to meet our obligations as they become
due. We believe that our success will depend in large part on our ability to (i)
offer aesthetic, interesting and diverse casino-style games on our websites, as
well as sports and pari-mutuel wagering, (ii) attract players and provide them
with outstanding service, (iii) instill consumer confidence, and (iv) achieve
name recognition. Accordingly, we intend to invest heavily in site development,
technology and operating infrastructure, as well as marketing and promotion. As
a result, we expect to incur operating losses in the initial stages of our
business and for the foreseeable future.

Our business is speculative and dependent upon the acceptance of our websites
and the effectiveness of our marketing program. Our only assets will be the
offshore Internet gaming websites, some administrative office furniture and
equipment and the revenues derived from the websites. There can be no assurance
that our Internet gaming and sports wagering websites will be successful or
result in revenue or profit. There is no assurance that we will earn significant
revenues or that investors will not lose their entire investment.

If we fail to respond to change our clients may use competitors products and
- ----------------------------------------------------------------------------
services.
- ---------

If we face material delays in introducing new services, products and
enhancements, customers may forego the use of our services and use those of
competitors. To remain competitive, we must continue to enhance and improve the
functionality and features of the websites. The Internet and the online commerce


- --------------------------------------------------------------------------------
Annual Report - 2003                                                  Page 2
<PAGE>

                             NET FORCE SYTEMS, INC.
- --------------------------------------------------------------------------------

industry are rapidly changing. If competitors introduce new products and
services, or if new industry standards and practices emerge, the existing
websites, technology and systems may become obsolete. To develop the websites
and technology entails significant technical and business risks. We may use new
technologies ineffectively or may fail to adapt the technology to meet customer
requirements or emerging industry standards.

Because we use intellectual property, claims may be asserted against the company
- --------------------------------------------------------------------------------
for infringing intellectual property rights.
- --------------------------------------------

Other parties may assert infringement or unfair competition claims against the
Company. We cannot predict whether they will do so, or whether any future
assertions or prosecutions will harm the business. If we are forced to defend
against any infringement claims, whether they are with or without merit or are
determined in our favor, then we may face costly litigation, diversion of
technical and management personnel, or product shipment delays. Further, the
outcome of a dispute may be that management would need to develop non-infringing
technology or enter into royalty or licensing agreements. Royalty or licensing
agreements, if required, may be unavailable on terms acceptable to management,
or at all.

If the trademarks, copyrights and trade secrets we rely on fail others will
- ---------------------------------------------------------------------------
benefit reducing our competitive advantage.
- -------------------------------------------

We intend to take steps to protect proprietary rights which steps may be
inadequate. Management regards copyrights, service marks, trademarks, trade
secrets and similar intellectual property as critical to its success. We intend
to rely heavily on trademark and copyright law, trade secret protection and
confidentiality or license agreements with our employees, customers, partners
and others to protect proprietary rights. Effective trademark, service mark,
copyright and trade secret protection may not be available in every country in
which we intend to provide its services. Furthermore, the relationship between
regulations governing domain names and laws protecting trademarks and similar
proprietary rights is unclear. Therefore, we may be unable to prevent third
parties from acquiring domain names that are similar to, infringe upon or
otherwise decrease the value of intended trademarks and other proprietary
rights.

The Internet and Internet-based casinos are new industries and therefore we do
- ------------------------------------------------------------------------------
not know if they will continue to be accepted by the public in the future.
- --------------------------------------------------------------------------

Both the Internet and Internet-based casinos are relatively new industries. The
market for Internet and Sports wagering has only recently begun to develop, is
rapidly evolving and is characterized by an increasing number of market
entrants. As is typical in the case of a new and rapidly evolving industry,
demand and market acceptance for recently introduced services are subject to a
high level of uncertainty. There can be no assurance that gaming and wagering on
the Internet will become widespread, or that our websites will become widely
used. If the market fails to develop, develops more slowly than expected or
becomes saturated with competitors or if our services do not achieve market
acceptance, our business, operating results, and the financial condition will be
materially adversely affected. Because of the uncertainty regarding the legality
of Internet wagering in the United States, and the existing or possible
prohibitions in other jurisdictions, we will not permit play by Canadian
residents, and may be precluded from offering play to residents of other
countries.

Because e-commerce transactions are subject to security risks it may inhibit the
- --------------------------------------------------------------------------------
growth of the industry and the acceptance of our products and services.
- -----------------------------------------------------------------------

Concerns over the security of transactions conducted on the Internet and other
on-line services as well as user's desires for privacy may also inhibit the
growth of gaming and wagering on the Internet. The activities of the Company are
expected to involve the storage and transmission of proprietary information,
such as credit card numbers and other confidential information. Any such
security breaches could damage our reputation and expose us to a risk of loss,
litigation and possible liability. There can be no assurance that our security
measures will prevent security breaches or that failure to prevent such security
breaches will not have a material adverse effect on the Company's business,
financial condition and results of operations. The Company is dependent on World
Gaming for its software and the hosting of its websites.

Businesses on the Internet are subject to the risk of credit card fraud and
other types of theft and fraud perpetrated by "hackers" and on-line thieves.
Credit card companies may hold merchants fully responsible for any fraudulent
purchases made when the signature cannot be verified. Although credit card

- --------------------------------------------------------------------------------
Annual Report - 2003                                                  Page 3
<PAGE>

                             NET FORCE SYTEMS, INC.
- --------------------------------------------------------------------------------

companies and others are in the process of developing anti-theft and anti-fraud
protections, and while the Company itself will continually monitor this problem,
at the present time the risk from such activities could have a material adverse
effect on us. A party who is able to circumvent our security measures could
misappropriate confidential information or cause interruptions in our
operations. We may be required to expend significant capital and other resources
to protect against such security breaches or to alleviate problems caused by
such breaches. If a compromise of our security were to occur, or if World
Gaming's software or website hosting fails, there could be a material adverse
effect on our business, financial condition and the results of operations.

Because Consumer's may lack confidence in how we set our odds our business may
- ------------------------------------------------------------------------------
not be accepted.
- ----------------

Concerns that a virtual casino's odds can be easily and arbitrarily manipulated
may deter customers from using our website. There can be no assurance that we
will be able to instill customer confidence in and alleviate negative
perceptions about Internet gaming. If our efforts are unsuccessful, it could
have a material adverse effect on our business, financial condition and the
results of operations.

We are subject to competition from other gaming and sports wagering operators
- -----------------------------------------------------------------------------
that are larger and have more resources to compete in the gaming industry and
- -----------------------------------------------------------------------------
that have been operating in the industry for longer.
- ----------------------------------------------------

The market for our Internet gaming and sports wagering services is intensely
competitive. Our principal competitors include other on-line Internet casinos.
These competitors have longer operating histories, greater name recognition,
larger installed customer bases, and substantially greater financial, technical
and marketing resources than us. We believe that the principal factors affecting
competition in its proposed market include name recognition, ability to develop
aesthetic and diverse casino-style games, customer confidence, ability to
respond to changing customer needs, and ease of use. Other than technical
expertise and the limited time available to enter the market, there are no
significant proprietary or other barriers of entry that could keep potential
competitors from developing or acquiring similar tools and providing competing
services in our proposed market. Our ability to compete successfully in the
on-line casino and sports wagering business will depend in large part on its
ability to attract new players and respond effectively to continuing
technological changes by developing more sophisticated on-line casino games.
There can be no assurance that we will be able to compete successfully in the
future, or that future competition will not have a material adverse effect on
the business, operating results and financial condition of the Company.

Because we may have to borrow in the future to keep our business operating we
- -----------------------------------------------------------------------------
may not be able to satisfy our debt obligations or to obtain debt financing that
- --------------------------------------------------------------------------------
allows us to remain in business.
- --------------------------------

There is no assurance that we will not incur debt in the future, that it will
have sufficient funds to repay its indebtedness or that we will not default on
our debt, jeopardizing our business viability. Furthermore, we may not be able
to borrow or raise additional capital in the future to meet our needs or to
otherwise provide the capital necessary to conduct our business. As of the
period ended April 30, 2003, the total outstanding long-term indebtedness is
$zero. Total liabilities are $156,280, comprised of $156,280, in current
liabilities.

Because we do not intend to pay any dividends on our common shares, investors
- -----------------------------------------------------------------------------
seeking dividend income or liquidity should not purchase common shares in this
- ------------------------------------------------------------------------------
offering.
- ---------

We do not currently anticipate declaring and paying dividends to our
shareholders in the near future. It is our current intention to apply net
earnings, if any, in the foreseeable future to increasing our capital base and
marketing. Prospective investors seeking or needing dividend income or liquidity
should therefore not purchase the Shares. There can be no assurance that we will
ever have sufficient earnings to declare and pay dividends to the holders of our
common stock, and in any event, a decision to declare and pay dividends is at
the sole discretion of our Board of Directors.

Because we are subject to government regulation we could have our license
- -------------------------------------------------------------------------
revoked at anytime.
- -------------------

The wagering and casino industry is subject to extensive government regulation
and licensing requirements in certain jurisdictions of the world. Legal
uncertainties may preclude us from offering our planned Internet gaming in
certain jurisdictions like Canada. Some jurisdictions may impose restrictions,
licensing requirements or prohibitions on Internet wagering. No assurance can be
made that such restrictions, prohibitions or licensing requirements will not
arise which would materially adversely effect our business, operating results
and financial condition of the Company. Also see Item 4. - L., Recent Regulatory
Developments In the Internet Gambling Industry.

- --------------------------------------------------------------------------------
Annual Report - 2003                                                  Page 4
<PAGE>

                             NET FORCE SYTEMS, INC.
- --------------------------------------------------------------------------------

Because we depend on a small group of qualified people, if we cannot hire and
- -----------------------------------------------------------------------------
retain qualified personnel, we might be forced to discontinue our operations.
- -----------------------------------------------------------------------------

Our success is substantially dependent on the performance of our executive
officers and key employees. Given our early stage of development in the Internet
gaming business, we are dependent on our ability to retain and motivate high
quality personnel. Although we believe we will be able to attract, retain and
motivate qualified personnel for such purposes, an inability to do so could
materially adversely affect the Company's ability to market, sell, and enhance
our services. The loss of one or more of our employees or our inability to hire
and retain other qualified employees could have a material adverse effect on the
Company. Currently, we identify Mr. Terry G. Bowering, President and Chief
Executive Officer, as a key person, as he is involved in the direction of all
aspects of the daily operations of the Company. Mr. Bowering does not have an
employment contract in place, nor is there any key person insurance on himself.
We also depend on Mr. Derek C. Ferguson, Internet Technology Consultant, Mr.
Clint Jendyk, Director of Website Design and Development, and Mr. Richard
Pestes, Internet Marketing Consultant. We have not entered into any employment
or management contracts with our employees nor do we maintain "key-person"
insurance of any kind.

Because our current or proposed insurance coverage may not be adequate uninsured
- --------------------------------------------------------------------------------
losses may occur.
- -----------------

There is no assurance that we will not incur uninsured liabilities and losses as
a result of the conduct of its proposed business. We plan to maintain
comprehensive liability and property insurance at customary levels. We will also
evaluate the availability and cost of business interruption insurance. However,
should uninsured losses occur, the shareholders could lose their invested
capital.

There is no assurance that we can pay our liabilities.
- ------------------------------------------------------

We have liabilities to affiliated and unaffiliated lenders. As at April 30,
2003, our total amount of liabilities is $156,280. Current liabilities to
unaffiliated lenders (accounts payable) consist of accrued wages payable,
International telephone and Internet service payable to Cable and Wireless
Telecommunications Company, and fees payable to Pannell Kerr Forster for
accounting and auditing services. Customer account deposits account for $51,637
or 33% of total liabilities. Accrued wages payable for Terry G. Bowering,
President and Chief Executive Officer, account for $53,387, or 34% of total
liabilities. Stock subscription payable for legal and consulting services
rendered accounts for $12,500 or 8% of total liabilities. We currently have no
long term debt. Our liabilities represent fixed costs, which are required to be
paid regardless of the level of profitability experienced by us. There is no
assurance that we will be able to pay all of our liabilities. Furthermore, we
are always subject to the risk of litigation from players, employees, suppliers
or others because of the nature of our business. Litigation could cause us to
incur substantial expenses and, if cases are lost, judgments and awards could
add to the Company's costs.

Because Net Force and its officers and directors are located in NON-U.S.
JURISDICTIONS, investors may have no effective recourse against Net Force or its
management for misconduct and you may not be able to enforce judgments and civil
liabilities against Net Force and its officers, directors, experts and agents.

Net Force Systems Inc. has been incorporated under the laws of Antigua and
Barbuda, and our executive offices are located in Antigua. Our directors,
controlling persons and officers, and representatives of the experts named in
this prospectus, are not residents of the Unties States of America, and a
substantial portion of their assets and all of our assets are located outside
the United States. As a result, it may be difficult for investors to effect
service of process within the United States upon us, the directors, controlling
persons, officers and representatives of experts who are not residents of the
United States or to enforce against them judgments of courts of the United
States based upon civil liability under the federal securities laws of the
United States. There is doubt as to the enforceability in Antigua against us or
against any of our directors, controlling persons, officers or representatives
of the experts who are not residents of the United States, in original actions
or in actions for enforcement of judgments of United States courts and of
liabilities based solely upon the federal securities laws of the United States.

Risks Related to the Industry
- -----------------------------

Our business is dependent upon the continued acceptance of our e-commerce gaming
- --------------------------------------------------------------------------------
industry by the public.
- -----------------------

Our future revenues substantially depend upon the increased acceptance and use
of the Internet and other online services as a medium of commerce. Rapid growth
in the use of the Internet, the Web and online services is a recent phenomenon.

- --------------------------------------------------------------------------------
Annual Report - 2003                                                  Page 5
<PAGE>

                             NET FORCE SYTEMS, INC.
- --------------------------------------------------------------------------------

As a result, acceptance and use may not continue to develop at historical rates
and a sufficiently broad base of customers may not adopt, and/or continue to
use, the Internet and other online services as a medium of commerce and
entertainment. Demand and market acceptance for recently introduced services and
products over the Internet are subject to a high level of uncertainty and there
exist few proven services and products.

In addition, the Internet may not be accepted as a viable long-term commercial
marketplace for a number of reasons, including potentially inadequate
development of the necessary network infrastructure or delayed development of
enabling technologies and performance improvements. If the Internet continues to
experience significant expansion in the number of users, frequency of use or
bandwidth requirements, the infrastructure for the Internet may be unable to
support the demands placed upon it. In addition, the Internet could lose its
viability as a commercial medium due to delays in the development or adoption of
new standards and protocols required to handle increased levels of Internet
activity, or due to increased governmental regulation. Changes in, or
insufficient availability of, telecommunications services to support the
Internet also could result in slower response times and adversely affect usage
of the Internet generally.

Our business, financial condition and results of operations would be seriously
harmed if: use of the Internet, the Web and other online services does not
continue to increase or increases more slowly than expected; the infrastructure
for the Internet, the Web and other online services does not effectively support
expansion that may occur; the Internet, the Web and other online services do not
become a viable commercial marketplace; or traffic to the websites decreases or
fails to increase as expected or if management spends more than was expected to
attract visitors to the websites.

Because we may not be able to maintain or obtain present and future domain names
- --------------------------------------------------------------------------------
we may not be able to prevent third parties from benefiting from our domain
- ---------------------------------------------------------------------------
names.
- ------

We may be unable to acquire or maintain Web domain names relating to the brand
in the jurisdictions in which management may conduct business. As a result, we
may be unable to prevent third parties from acquiring and using domain names
relating to our brand, which could damage our brand and reputation and take
customers away from our websites. Governmental agencies and their designees
generally regulate the acquisition and maintenance of domain names. The
regulation of domain names in the United States and in foreign countries is
subject to change in the near future. The changes in the United States are
expected to include a transition from the current system to a system that is
controlled by a non-profit corporation and the creation of additional top-level
domains. Governing bodies may establish additional top-level domains, appoint
additional domain name registrars or modify the requirements for holding domain
names.

Because laws may change in the future to protect the public there may be a
- --------------------------------------------------------------------------
requirement to change the manner of how we do business.
- -------------------------------------------------------

The adoption or modification of laws or regulations relating to the Internet
could adversely affect the manner in which we propose to conduct our business.
In addition, the growth and development of the market for online gaming may lead
to more stringent consumer protection laws, both in the United States and
abroad, that may impose additional burdens on the Company. Laws and regulations
directly applicable to communications or commerce over the Internet are becoming
more prevalent. The United States Congress recently enacted Internet laws
regarding children's privacy, copyrights, taxation and the transmission of
sexually explicit material. The European Union recently enacted its own privacy
regulations. Laws regulating the Internet, however, remain largely unsettled,
even in areas where there has been some legislative action. It may take years to
determine whether and how existing laws such as those governing intellectual
property, privacy, libel, and taxation apply to the Internet.

In order to comply with new or existing laws regulating online commerce, we may
need to modify the manner in which we propose to do business, which may result
in additional expenses. For instance, we may need to spend time and money
revising the process by which we intend to accept players' wagers to ensure that
each wager complies with applicable laws. We may need to hire additional
personnel to monitor compliance with applicable laws. We may also need to modify
our software to further protect players' personal information.

The Company and the industry as a whole are under threat from certain factions
within the U.S. Congress that seek to ban Internet gambling. We may be subject
to regulation or prohibition of Internet Gaming in certain jurisdictions,
including the United States, which could have a significant adverse effect on
our business. If this legislation passes and becomes law, it would have an
immediate detrimental effect on the industry and would pose a serious threat to

- --------------------------------------------------------------------------------
Annual Report - 2003                                                  Page 6
<PAGE>

                             NET FORCE SYTEMS, INC.
- --------------------------------------------------------------------------------

the company's continued operation in the Internet gaming industry. (See Item 4.
- - K., L., Government Regulation, Recent Regulatory Developments)

Because we are liable for the content of our website we may be subject to
regulation and law suits arising from the content. As a publisher of online
content, we face potential liability for defamation, negligence, copyright,
patent or trademark infringement, or other claims based on the nature and
content of materials that we publish or distribute. If we face liability, then
our reputation and our business may suffer. In the past, plaintiffs have brought
these types of claims and sometimes successfully litigated them against online
companies. In addition, we could be exposed to liability with respect to the
unauthorized duplication of content or unauthorized use of other parties'
proprietary technology. Although we intend to carry general liability insurance,
such insurance may not cover claims of these types. We cannot be certain that we
will be able to obtain insurance to cover the claims on reasonable terms or that
we will be adequate to indemnify the management or the Company for all liability
that may be imposed. Any imposition of liability that is not covered by our
insurance or is in excess of insurance coverage could harm the business.

Because government regulation may force us to collect and remit taxes we may
- ----------------------------------------------------------------------------
have to modify our system which would be expensive and reduce potential
- -----------------------------------------------------------------------
profitability.
- --------------

If one or more states or any foreign country successfully asserts that we should
collect taxes on the winnings earned by players, the financial position and
results of operations could be harmed. If we become obligated to collect taxes,
we will need to update our system that processes wagers and winnings to
calculate the appropriate sales tax for each player and to remit the collected
sales to the appropriate authorities. These upgrades will increase operating
expenses. In addition, players may be discouraged from utilizing our websites
because they have to pay tax, causing net sales to decrease. As a result, we may
be adversely materially affected.

Risks Related to Securities Market
- ----------------------------------

We cannot be certain that additional financing will be available on favorable
- -----------------------------------------------------------------------------
terms when required, or at all.
- -------------------------------

If we raise additional funds through the issuance of equity, equity-related or
debt securities, the securities may have rights, preferences or privileges
senior to those of the rights of the common stock and those stockholders may
experience additional dilution. We expect to require substantial working capital
to fund the business. Since inception, we have experienced negative cash flow
from operations and expect to experience significant negative cash flow from
operations for the foreseeable future. Management currently anticipates that the
private financing done to date, together with expected revenues, and additional
shareholder loans if necessary, will be sufficient to meet anticipated needs for
working capital and capital expenditures through at least the next 12 months.
After that, we may need to raise additional funds.

The market price for our common stock is likely to be highly volatile and
- -------------------------------------------------------------------------
subject to wide fluctuations.
- -----------------------------

As a result of this volatility some or all of the following can occur: actual or
anticipated variations in the quarterly operating results; announcements of
technological innovations or new services by us or our competitors; changes in
financial estimates by securities analysts; conditions or trends in the Internet
and/or online commerce or gaming industries; changes in the economic performance
and/or market valuations of other Internet, online gaming companies;
announcements by management or competitors of significant acquisitions,
strategic partnerships, joint ventures or capital commitments; additions or
departures of key personnel; release of lock-up or other transfer restrictions
on the outstanding shares of common stock or sales of additional shares of
common stock; and potential litigation.

In addition, the stock market has from time to time experienced extreme price
and volume fluctuations. These broad market fluctuations may adversely affect
the market price of our common stock.

In the past, following periods of volatility in the market price of their stock,
- --------------------------------------------------------------------------------
many companies have been the subject of securities class action litigation.
- ---------------------------------------------------------------------------

If we were sued in a securities class action, it could result in substantial
costs and a diversion of management's attention and resources and would cause
the stock price to fall.

- --------------------------------------------------------------------------------
Annual Report - 2003                                                  Page 7
<PAGE>

                             NET FORCE SYTEMS, INC.
- --------------------------------------------------------------------------------

ITEM 4. INFORMATION ON THE COMPANY
- ----------------------------------

A. BUSINESS
- -----------

Business Development
- --------------------

Net-Force Systems Inc.
- ----------------------

Net-Force Systems Inc. was incorporated in March 1999 under the laws of Antigua
and Barbuda as Net-Force Systems Inc. Our corporate website can be viewed on the
World Wide Web at www.netforcesystems.com. We sub-license online gaming software
                  -----------------------
and provide marketing and support services for Internet gaming website
operators, through our wholly owned subsidiary, Netforce Entertainment Inc.
Netforce Entertainment sub-licenses Internet gaming software that offers a
variety of casino-style gaming options as well as an on-line sports wagering
service, utilizing the rapidly expanding medium known as the Internet. Netforce
Entertainment Inc. acts as the operating company for all business activities
relating to the online gaming operations.

Netforce Entertainment Inc. has entered into a non-exclusive software agreement
to license proprietary Internet casino software and systems from World Gaming
Plc., a publicly traded corporation domiciled in the United Kingdom and formerly
known as Starnet Systems, Inc. Included in this software agreement is a contract
between Netforce Entertainment Inc. and EFS Caribbean Inc., a secure online
financial transaction processor, to collect and process revenues generated from
our Internet gaming websites. The agreement with EFS Caribbean Inc. includes the
payment processing fees, terms, and conditions (see Exhibit 10.1). Any reference
to the term 'master agreement' or 'master license' should be defined as having a
direct software license agreement with a software provider (World Gaming). A
sub-license agreement is defined as being an agreement whereby Netforce
Entertainment Inc. acts as licensor of a software provider's (World Gaming)
software to a third-party operator in exchange for an up-front fee plus a
negotiated a revenue sharing agreement. Typically, there are web-site design and
development costs incurred for initial set up and custom-designing a prospective
sub-licensee's casino website. The commission paid to a sub-licensee starts at
50% of net revenue and moves up incrementally as volume increases. There are
currently no sub-licence agreements in place at this time. A marketing agreement
(also known as "Partners" or "Affiliates" or "Resellers") is defined as an
agreement between Netforce Entertainment Inc. and either a webmaster with an
Internet site that has established customer traffic of their own or another
casino site linked to our primary casino site as a partner. There is no up-front
fee charge for a partner. A monthly commission starting at 25% of the net
revenues is paid to these as compensation for sending playing customers to our
sites. Special online tracking software provided by World Gaming accounts for an
affiliate's customer activity and calculates net revenue upon which the
commission is based. We currently have approximately 200 registered partners
with marketing agreements in place. Agreements are consummated online by
accepting the `terms and conditions' prior to completing the online registration
form. We oversee a number of Internet gaming websites under marketing agreements
and we have implemented a substantial marketing program with initial advice from
World Gaming. Headquartered in Antigua, EFS Caribbean, Inc. is a wholly owned
offshore subsidiary of World Gaming Plc. We intend to engage in additional
software agreements with other online gaming software providers with the
objective of offering a wide variety of online gaming and wagering products and
services thus reducing our reliance on any single technology provider and/or
software platform.

The Company, including our subsidiaries, employs 4 full time persons on a
contract as-needed basis. The individuals are either involved in developing and
implementing a marketing strategy for us or are providing website maintenance
and development and customer support.

Net-Force Systems Inc. Corporate History
- ----------------------------------------

In March 1999, we filed our Articles of Incorporation with the Director of
International Business Corporations, Government of Antigua and Barbuda as
Net-Force Systems Inc., in which, among other things, the Board of Directors was
elected as follows: Terry G. Bowering and Douglas N. Bolen. The authorized
capital of the Company consists of 100,000,000 Common Shares and 50,000,000
Preferred Shares. On March 15, 1999, the Directors, by way of Organizational
Consent of the Directors of the Company, accepted the stock subscriptions and
payment for the number of shares issued to the individuals referred to above at
a price of $0.001 per share. In addition, the Directors appointed Terry G.
Bowering to the office of President, CEO and Chairman of the Board, and Douglas


- --------------------------------------------------------------------------------
Annual Report - 2003                                                  Page 8
<PAGE>



                             NET FORCE SYTEMS, INC.
- --------------------------------------------------------------------------------

N. Bolen to the office of Secretary. On December 20, 1999, Mr. Dwight Lewis was
appointed to the Board of Directors.

On March 15, 1999, we accepted subscription agreements from six entities to
acquire securities of the Company pursuant to a Rule 504 offering under
Regulation D. The Board authorized the Company to proceed with the sale of its
shares pursuant to the subscriptions received for the sale of 3,000,000 Common
Shares at a price of $0.01 per Common Share. Pacific Stock Transfer Company was
appointed as the Transfer Agent of the Common Shares of the Company.

On July 15, 1999, we signed a software licensing agreement with Softec Systems
Caribbean Inc., now known as World Gaming Plc., to launch and market a turnkey
Internet Gaming website. On July 15, 1999, we issued a promissory note to
Mountain High Management Inc. to borrow $495,000 at an interest rate of 15%.
August 5, 1999 marked the date of incorporation of Netforce Entertainment Inc.,
wholly owned subsidiary of Net-Force Systems Inc., under the laws of Antigua and
Barbuda. Netforce Entertainment Inc. acts as the operating subsidiary for the
Internet Gaming web site operations.

The Internet Gaming website www.aogaming.com was initially launched on April 7,
                            ----------------
2000.

On June 1, 2000, the Board of Directors resolved to authorize the redemption of
the common stock, which was issued pursuant to Rule 504 on or about March 15,
1999 and the same was effected shortly thereafter. On the same date, pursuant to
Regulation S, the Board authorized the issuance of 2,500,000 Units comprised of
one (1) $0.001 par value common stock and one (1) warrant that allows the holder
to purchase one (1) share of the Company's $0.001 par value common stock at an
exercise price of $2.00 per share, to be exercised no later than December 31,
2002 after which the warrants would become null and void. Each Unit was offered
at the price of $0.10. This offering was sold out on or about June 30, 2000.

On October 26, 2000, Douglas Bolen resigned as Director and secretary of the
Company. On August 15, 2001, Mr. Trevor Bowering was appointed to the Board of
Directors. On September 10, 2001, Mr. Derek Ferguson was appointed to the Board
of Directors.

On September 15, 2001, all long-term debt and promissory notes including related
party shareholder loan from Geneva Overseas Holdings Ltd. were converted to
equity for a total of 8,706,0333 shares issued at $0.10 per share. (See
Financial Statements, Note 6 - Stock Transactions and Note 11 - Subsequent
Events).

On November 15, 2001, pursuant to a Rule 506 Offering, the Board authorized the
Company to proceed with the sale of its shares pursuant to subscriptions
received at a price of $0.10 per Common share. The Company accepted subscription
agreements from U.S. residents from states including California, Arizona, and
Florida. On January 29, 2002, the offering was closed and the Board resolved to
authorize the issuance of 160,000 Common shares at $0.10 per share.

On November 2nd, 2002, Net-Force Systems Inc. was declared effective as a Fully
Reporting Foreign Issuer by the United States Securities and Exchange Commission
by virtue of the filing of its F-1 Registration Statement (file #333-96561).

On December 31st, 2002, J. Alexander Securities filed a 15c211 application to
the NASD on behalf of Netforce Systems Inc. On February 21st, 2003, Net-Force
Systems Inc. officially received the trading symbol NTFSF from the NASD to trade
publicly on the Over-the-Counter Bulletin Board Exchange (OTC:BB). No shares
have been traded to date.

On June 1st, 2003, through an Extraordinary Shareholders Resolution dated June
1st, 2003, Net-Force Systems Inc. approved the sale of all of the 100 issued
shares of Net Force Entertainment Inc., the operating subsidiary of Net Force
Systems Inc., for total proceeds of $100.00 plus the assumption of debt, to
Geneva Overseas Holdings Ltd., a British Virgin Islands Corporation. The company
no longer has any control over Net-Force Entertainment Inc. See Subsequent
Events in Note 11 to the Consolidated Financial Statements for a summary of the
Discontinued Operations for the years ended April 30, 2003, 2002, 2001.

On June 3rd, 2003, Net-Force Systems Inc. created a new subsidiary named
Atlantica Resorts Ltd., in the jurisdiction of the territory of the British
Virgin Islands pursuant to the International Business Corporations Act. The


- --------------------------------------------------------------------------------
Annual Report - 2003                                                  Page 9
<PAGE>



                             NET FORCE SYTEMS, INC.
- --------------------------------------------------------------------------------

purpose of this corporation is to pursue opportunities in the resort properties
marketing industry in the Caribbean. See Item 5 - Operating and Financial Review
and Prospects: Operations Over the Next Twelve Months.

On June 10, 2003, the Company authorized the issuance of 25,000 shares of common
stock for conversion of debt to equity valued at $0.10 per share or $2,500.


B. Business of the Issuer
- -------------------------

Netforce Entertainment Inc. was incorporated on August 5, 1999 pursuant to the
International Business Corporations Act of Antigua and Barbuda and is based in
Antigua. Netforce Entertainment is a wholly owned subsidiary of the Company and
acts as the operating entity for our online gaming operations.

Netforce Entertainment Inc. currently maintains an international gaming website
called Antigua Online Gaming located on the World Wide Web at www.aogaming.com.
                                                              ----------------
Netforce Entertainment Inc. has entered into agreements with software vendors,
including, World Gaming, Plc. for the rights to use its proprietary Internet
gaming software, and with Electronic Financial Services Caribbean, Inc. for the
use of its electronic financial conversion system in relation to the processing
of credit cards. Electronic Financial Services Caribbean, Inc. is a wholly owned
subsidiary of World Gaming, Plc. (see Exhibit 10.1). For specific terms and fees
for payment processing under Electronic Financial Services Caribbean Inc., see
Exhibit 10.1.

World Gaming, Plc., a United Kingdom, publicly-traded corporation with operating
subsidiaries in Antigua is in the business of licensing complete, customized
Internet gaming systems to third-party offshore gaming license holders. World
Gaming currently supports in excess of 20 such licensees operating worldwide and
has endorsed Net-Force Entertainment as a master licensee. World Gaming provides
customized software, website development and management on its network, custom
database systems to manage player accounts, and technical support. Netforce
Entertainment Inc., has entered into a software licensing agreement with World
Gaming (See Exhibit 10.1) whereby World Gaming licenses certain Internet casino
software to Netforce Entertainment Inc. and has developed the graphical front
end of the gaming site in exchange for a one-time payment and an on-going
percentage of the gross revenues from our website. (See Exhibit 10.1).

World Gaming hosts our offshore subsidiary's websites. World Gaming also
provides and maintains all hardware necessary for the operation of the websites
and provides a complete transaction processing system that allows players to
deposit funds for use of the games. The hardware is maintained in World Gaming's
offices and co-location facilities located in Antigua.

To ensure the security of funds transfers over the Internet, Netforce
Entertainment, Inc. utilizes the services of Electronic Financial Services
Caribbean, Inc. Electronic Financial Services Caribbean, Inc., also an Antigua
corporation and wholly owned subsidiary of World Gaming, is in the business of
securely converting electronic funds between financial institutions and other
companies. Through alignments with major banks, Electronic Financial Service
Caribbean processes conversions of worldwide currencies into "e-cash."
Electronic Financial Service Caribbean utilizes World Gaming's proprietary
STAR-MX encoding and processing technology to process tens of thousands of
Internet credit card transactions per month.

The World Gaming software license agreement allows us to pursue our objective of
establishing ourselves as one of the leading providers of Internet gaming and
sports wagering services. Through our subsidiary, Netforce Entertainment, Inc.
we currently offer via the Internet up to 25 casino-style gaming opportunities,
including baccarat, Japanese Pachinko, Chinese Pai Gow Poker, Blackjack and
Video Poker as well as a variety of live betting lines on all of the world's
major sporting events. The initial term of the master license is one year,
renewable indefinitely unless we give the licensor written notice of termination
of the license at least 45 days prior to the end of any one-year period.

On August 5, 1999, Netforce Entertainment Inc. was approved for and received an
official gaming license from the Antigua and Barbuda Free Trade and Processing
Zone enabling us to legally conduct Virtual Casino and Sports Wagering
operations. Antigua is a jurisdiction that has clearly defined Internet Gaming
legislation in place that licenses and regulates Internet Gaming Operators.
Antigua charges license holders an annual license fee to maintain the gaming
license in good standing.


- --------------------------------------------------------------------------------
Annual Report - 2003                                                  Page 10
<PAGE>

                             NET FORCE SYTEMS, INC.
- --------------------------------------------------------------------------------

The International Press recognizes Antigua and Barbuda as the leader in the
regulation of the Internet Gaming industry. At a time when the issue of
regulation is being focused upon by the US media, a reputation of this kind is
of great importance to the Company and most especially to the Internet gambler.

Antigua and Barbuda is an independent country that has deemed Internet Gaming to
be a legitimate and legal business activity protected and supported under
enacted legislation on that Caribbean island nation. Of vital importance, Cable
and Wireless (West Indies) Telecommunications Company has established Antigua as
a primary hub to facilitate the Internet Gaming industry for its regional
network of submarine fiber-optic cables laid across the Atlantic and Caribbean
enabling Antigua to offer diversified high quality Internet connections into
North America.

Net-Force Entertainment Inc. was fully licensed under the Antigua and Barbuda
Offshore Gaming Commission up to the fiscal period ending April 30th, 2002. For
the fiscal period of May 1st, 2002 to April 30, 2003, Net-Force Entertainment
Inc. operated under an umbrella master gaming license obtained by World Gaming
from the Government of Curacao, in the Netherlands Antilles. Netforce
Entertainment's primary casino and sportsbook gaming website URLs can be found
on the World Wide Web at www.aogaming.com, www.aocasino.com, and
                         ----------------  ----------------
www.aosportsbook.com.
- --------------------

Our policy for the gaming websites we oversee is to accept subscriptions only
from persons over the age of 18 years and believed to reside in jurisdictions
that are not explicitly known to expressly prohibit Internet gaming. The
development of our primary gaming website, www.aogaming.com, was initially
                                           ----------------
completed and launched on April 7, 2000.

Through the software license acquired from World Gaming, we offer up to 25
virtual casino games and live sportsbook wagering on most of the world's major
sporting events. Included with the software license is the procurement of an
initial Internet gaming license, concept development and design of the Web based
casino(s), all odds-making rules and regulations, complete graphical user
interface with sophisticated visual and sound effects to create a total gaming
experience, real time wagering, complete secure electronic funds transfer,
retention and analysis of all gaming data, including win/loss, game preferences
and monitoring of player activities, administration and complete 24 hour per
day, 7 days per week customer support services, ongoing customization of the
websites, the monitoring of all funds flow, the hosting of server software,
customization and server integration, the provision of credit card processing
and other banking services, discussion, liaison and co-operation with testing
agencies, regulatory boards, governing bodies and governments and marketing
consulting. All of the above functions are undertaken and managed by the
software provider, World Gaming. Net-Force Entertainment Inc., as a software
'licensee', is essentially focused on Internet marketing activities which
maximize traffic to the web-sites for the purpose of establishing and developing
a large customer database.


C. Business and Marketing Strategies
- ------------------------------------

We intend to capitalize on the evolving opportunities on the Internet by
developing and marketing Internet casinos and sports wagering websites to small
and medium sized third-party operators at a reduced initial investment. To
capitalize on this lucrative opportunity, Netforce Entertainment Inc., a wholly
owned subsidiary of Netforce Systems Inc., and based in Antigua West Indies, was
established. Netforce Entertainment Inc.'s corporate mission is to deliver
efficient and entertaining online gaming services to a global market of end user
customers. Netforce Entertainment Inc. will provide online gaming software
licensing through third-party marketing agreements. Netforce Entertainment Inc.
will also provide marketing, support, and web-site design capabilities for
online gaming operators. Netforce Entertainment Inc. will utilize the Internet
to deliver these products in a cost-effective, efficient and profitable manner.
Netforce Entertainment Inc. aims to accomplish its objectives by applying the
following Business strategy:

     o    Netforce Entertainment Inc. will only enter into primary master
          software license agreements with the world's premiere online gaming
          software systems providers.

     o    To enhance the Company's reach on the Internet and to accelerate
          market penetration on the Internet, Netforce Entertainment Inc. will
          enter into agreements to market the gaming software technology to
          third party operators. Netforce Entertainment Inc. intends to
          establish a sales department solely responsible for marketing its
          turnkey Internet Casino and gaming systems packages to potential


- --------------------------------------------------------------------------------
Annual Report - 2003                                                  Page 11
<PAGE>

                             NET FORCE SYTEMS, INC.
- --------------------------------------------------------------------------------

          third-party sub-licensee operators. NE will target small to
          medium-sized operators and entrepreneurs and high-traffic web-site
          operators ('webmasters') that have experience in Internet commerce,
          hence increasing their odds of successfully adding to the company's
          customer base and income stream. This complete system will include a
          custom-designed themed graphic user interface and gaming Web-site,
          access to a legitimate Gaming License, transaction processing and
          accounting system, customer service support, marketing consultation,
          and offshore administrative services. In exchange for this package,
          Netforce Entertainment Inc. intends to receive an up-front fee and a
          percentage of ongoing revenues.

     o    Accelerated growth through acquisition. The offshore online gaming
          industry is currently fragmented and made up of a number of
          predominantly smaller private companies offering a variety of gaming
          services to a growing global customer base. Expected future industry
          consolidation provides an opportunity for Netforce to execute a
          strategy of actively seeking acquisitions of these small to
          medium-size established Internet gaming websites and operations, and
          therefore continually adding to the company's database of active
          customers at an accelerated pace. Netforce Entertainment Inc. will
          seek to acquire operations that present an opportunity for value
          creation through enhanced marketing and operational initiatives and
          synergies. This will further enhance the value of the Company's
          portfolio of Internet properties.

     o    Offer superior 24/7 customer support services to all of the playing
          customers that fall under the umbrella of Netforce Entertainment
          Inc.'s web site operations. This is essential to maintain and grow the
          customer database and to differentiate the Company's product offering
          in the market place. Customer service support for the websites is
          provided by World Gaming through Electronic Financial Services
          Caribbean Inc. as a condition of the software agreement. Customer
          support representatives deliver 24-hour customer and technical support
          to deal with casino games problems, deposit and payment inquiries,
          system downtime problems, and general questions. Netforce
          Entertainment Inc. provides secondary customer support via e-mail
          dealing with marketing, special promotions, and customer retention
          programs. Customers cannot place wagers over the telephone with either
          of the above customer service options.

Our business strategy is designed to promote the Net-Force brands and strive for
the industry leadership position by focusing on gaming, providing an innovative
and easy to use concept, acquiring players on an efficient basis, maximizing
player retention and expanding and leveraging our player base through multiple
marketing channels and third-party operators. We believe that this strategy
enables us to reduce reliance on any one source of players, maximize brand
awareness and lower average player acquisition costs. By combining expertise in
marketing, sophisticated computer software systems and a focus on excellent
customer service, we believe that we deliver an entertaining online gaming
experience for players. With our mandate of providing a gaming experience with
unmatched options and technology allowing for three-dimensional displays and a
wide gaming selection, Management believes customers are provided with a product
unparalleled in the marketplace. Management believes that the Internet is a
well-suited medium for the provision of entertainment products and services,
especially those related to user-friendly, innovative casino-style games.

We note that the auditor's opinion contains a going concern statement as of the
April 30, 2003 year-end audit (see Independent Auditor's Report, of the Audited
Financial Statements for April 30, 2003, also see note 4 to the financial
statements of the financial statements). However, long-term debt remains at zero
as at April 30, 2003. Total expenses including general and administrative
expenses and other expenses for the fiscal period ending April 30, 2003 were
$201,732 representing a decrease of 51%, as compared to the same period in the
previous year. To ensure the ongoing viability of Netforce Systems Inc., we plan
to raise additional capital through a private placement equity issuance or
engage in a viable merger transaction with a private or public company with an
established revenue and earnings profile during the second or third quarter of
fiscal period 2004. However, there can be no assurance that we will be
successful in finding a suitable merger/acquisition candidate.


D. The Company's Services and Products
- --------------------------------------

We have established websites, located on the Internet at www.aogaming.com,
                                                         ----------------
www.aocasino.com and www.aosportsbook.com that offer a comprehensive interactive
- ----------------     --------------------
gaming service including a virtual casino and live online sportsbook wagering
service. The websites are accessible to the general public, however only
established customers or players are permitted to play the gaming opportunities
offered for money. Established customers are defined as being customers who;
have agreed to the online terms and conditions by affirming and submitting, have
completed an online application (i.e. the "join" form) providing complete

- --------------------------------------------------------------------------------
Annual Report - 2003                                                  Page 12
<PAGE>



                             NET FORCE SYTEMS, INC.
- --------------------------------------------------------------------------------

identity and address information, and have submitted via fax a photocopy copy of
his/her credit card, signature, and identification to the customer service
department of Electronic Financial Services Caribbean Inc. This procedure both
verifies the identity of the customer and reduces risk of credit card fraud.
Customers who wish to try the games for fun are not required to go through this
procedure and are therefore not considered established customers.

Our websites are accessible by a minimum hardware configuration consisting of a
486 personal computer with Windows 95 or greater, with 16 Mega Bites RAM, 20
Mega Bites free hard disk space, a 14,400 modem and a direct PPP Internet
connection. All games are provided in a Windows-based, menu driven format with
"point and click" interactivity. Players who wish to conduct gaming operations
at the websites are able to subscribe over the Internet by completing an
application appearing on the websites. Part of the application process requires
that the subscriber open an account and make a minimum deposit with the company
of $20.

Our websites are designed to invite the players to sign up and apply for a
casino and sports book wagering membership. After a player's membership
application is received and reviewed by us, it is either accepted or rejected
based on criterion including, but not limited to, age and geographic location of
the player. Upon accessing our Websites, every new customer must review and
accept our online terms and conditions agreement which states that only players
over the age of 18 will be accepted and proof of age and identification will be
required. Our policy is to accept subscriptions only from players over the age
of 18 years and believed to reside in jurisdictions that are not known to
expressly prohibit Internet gaming. To monitor this policy, the online financial
transaction processor for our Websites, Electronic Financial Services Caribbean
Inc., utilizes a staff of customer service personnel who are available 24 hours
per day, 7 days per week, to administer a policy of requiring personal
identification documents (via fax or e-mail scanned copy) from each new customer
who deposits funds using a credit card. This typically includes a faxed
photocopy of front and back of the credit card used for the account along with a
copy of the signature, and a photocopy of both a driver's license and/or a
utility bill, as proof of both identity and address. The customer service
individual is also able to identify the customer's card-issuing bank to confirm
or verify any customer credit card information. Upon acceptance, the approved
player is allowed to download the gaming software over the Internet for
installation on their personal computer. We then provide the player with a
username and password through which the player is able to access the computer
servers on which the software is hosted, over the Internet through their
Internet service provider. This policy has proved to be adequate in identifying
and verifying a prospective customer's true identity and address.

World Gaming's Internet gaming software currently allows for acceptance of
account applications from all countries except Canada. It is our policy that in
the event that we become aware that any country or jurisdiction by law expressly
prohibits gaming activities over the Internet, we will block our services from
being offered to such countries and/or jurisdictions. A list of countries from
which we have accepted member subscriptions to date include Australia, France,
Germany, United Kingdom, Italy, Greece, Spain, Mexico, Argentina, Switzerland,
United States, Venezuela, The Netherlands, Singapore, Thailand, New Zealand,
Brazil, Panama, Ukraine, Israel, China, India, Belgium, Austria, Sweden,
Finland, and Turkey.

Our website allows the player to review all the terms, rules and conditions
applicable to gaming and other uses at the websites. All gaming winnings and
losses are debited and credited to the player's account on a real-time basis.
All games are conducted pursuant to house rules and advantages that are
published at the websites and which are at least favorable or more favorable
than those used by the major casinos in Las Vegas, Nevada.

We completed the process of designing the interfaces between the players and the
World Gaming software for Antigua Online Casino and Sportsbook by March 2000. We
beta tested the website for ease of use, clarity and accuracy prior to
officially launching the same on April 7, 2000. The gaming opportunities offered
at the website have been designed, in conjunction with World Gaming, to evoke
sights and sounds similar to a Las Vegas style casino. We include in these menu
choices the various gaming rooms, including black jack, baccarat, slot machines,
roulette and video poker. In addition, the player has the option to use the
sports betting option to place bets on sports events taking place around the
world. The players use the Windows format of commands to carry out the gaming
activities. The websites also include special effects such as three-dimensional
displays, sounds of cards shuffling, coins falling from virtual machines and
other generally familiar background casino sounds. In addition to English, we
also intend to offer players the ability to engage in the proposed gaming
activities in such languages as Spanish, German, Japanese and Chinese or in
whatever languages and/or ethnic identities as Management deems practical in
order to facilitate worldwide expansion of its player base.



- --------------------------------------------------------------------------------
Annual Report - 2003                                                  Page 13
<PAGE>

                             NET FORCE SYTEMS, INC.
- --------------------------------------------------------------------------------

We intend to conduct continuing development of our websites (and such additional
websites as we deem appropriate with varying themes and languages) and the
products offered thereat in accordance with our customers' demonstrated
preferences, demographics, and the evolution of new technologies. Our goal is to
utilize the World Gaming software and such other software, which may be
identified by us as useful in order to provide the players with gaming services,
which is competitive, innovative and easy to use in the Internet gaming
industry.


E. Marketing
- ------------

We have implemented a comprehensive marketing program in conjunction with our
software provider. We believe that international markets will represent a
significant portion of our revenues in the near future since many of the
products and services intended to be offered are not currently available in
these markets. Our websites are intended in the future to contain translations
of account registration forms and playing instructions and the proposed customer
service representatives are intended to be fluent in all languages offered at
the websites.

We have established our offices in St. John's, Antigua, British West Indies at
Suite #10, Woods Centre, Friars Hill Road, PO Box W-645, St. John's, Antigua,
British West Indies. From these offices, the Company conducts all head office
administrative activities. Also, from these offices, Netforce Entertainment Inc.
conducts all marketing and customer support activities for the Internet Gaming
sites that we oversee. The marketing program incorporates the following
strategies to target its players:

Strategic Alliances with Major Content and Service Providers. We intend to seek
- ------------------------------------------------------------
to enter into strategic alliances with major Internet content and service
providers in order to enhance our new customer acquisition efforts, increase
purchases by current customers and expand brand recognition. We are striving to
enter into alliances with Internet search engines services that provide for us
to be the premier online gaming provider on certain of their sites with the
exclusive right to place gaming banner advertisements and integrated links to
the Net-Force sites on certain gaming-related Web pages. To date, no such
alliances have been identified or entered into by us. We currently do not
advertise with any major Internet content and/or service providers. However, in
the past, we have placed advertising on Internet sports content sites such as
The Sports Network, Football.com, Basketball.com, and Rotonews.com. We have not
advertised in the past with any Internet Service Providers.

On-Line and Traditional Advertising. We have promoted our brands through an
- -----------------------------------
aggressive marketing campaign using a combination of on-line and traditional
advertising. We advertise on the websites of major Internet content and service
providers, and targeted gaming-related websites. Our traditional advertising
efforts include print advertising in major magazines and gaming related
publications, and may also include radio advertising and television advertising.
We have advertised in the past in the following publications: High Roller
Magazine - Spring 2000 Special Issue, Time Magazine/Atlantic Edition, April 17,
2000, Special Advertising Section - World Focus: Antigua and Barbuda, Alaska
Airlines In-Flight Magazine (scheduled flights to Las Vegas), April, June, and
August 2000 Issues. We currently have no print advertising placed.

Direct Marketing. We use direct marketing techniques to target new and existing
- ----------------
players with communications and promotions. We send a personalized e-mail
newsletter to registered players that includes, recommendations based on
demonstrated player preferences and prior usage.

Banner Advertisements. Banner advertisements are rectangular graphical/text
- ---------------------
images that can be positioned in various strategic places on Web pages and
search engines on the Internet. When a potential player clicks on the banner
advertisement, the player's Web Browser points the player to the advertiser's
home page. We pay for such banner advertisements on a variety of Web pages and
search engines, and participate in a banner exchange program. Examples of sites
where the company has placed banners for the casino sites it oversees including
www.football.com, www.basketball.com, www.tsn.com, www.rotonews.com,
- ----------------  ------------------  -----------  ----------------
www.rgtonline.com, casino and sports categories on www.about.com,
- -----------------                                  -------------
www.gambling.net, as well as other gaming portal sites such as Wager Talk,
- ----------------
Wagerline, and Talk Sports. As of the current date, we have no banner
advertising in place. We are focused on developing our webmaster/affiliate
network base to drive Internet traffic and customers to our websites. We intend
to continue to enter into agreements with Webmasters in which Webmasters agree
to place our banner advertisements on their Web pages in exchange for a
commission for each unique player who clicks through banners to our home page or
for a percentage of the profits generated by the Webmaster.

- --------------------------------------------------------------------------------
Annual Report - 2003                                                  Page 14
<PAGE>

                             NET FORCE SYTEMS, INC.
- --------------------------------------------------------------------------------

Submissions to Search Engines. Potential players often learn about websites on
- -----------------------------
the Internet from listings on search engines. We have submitted its URL's and a
brief description of its Internet casino gaming and sports wagering websites to
various search engines so that our information is available to potential players
who use search engines to locate Internet gaming sites. Examples of the search
engines that the company's URLs have been submitted to include: www.yahoo.com,
                                                                -------------
www.altavista.com , www.lycos.com, www.dmoz.com, www.directhit.com,
- -----------------   -------------  ------------  -----------------
www.euroseek.com , www.google.com , www.excite.com, www.looksmart.com,
- ----------------   --------------   --------------  -----------------
www.hotbot.com. The websites have also been submitted to the following Internet
- --------------
casino directories including but not limited to www.gamblingregistry.com,
                                                ------------------------
www.casinolocator.com, www.casinoseek.com, www.gambling.com, and
- ---------------------  ------------------  ----------------
www.top100casinos.com. These Directories are centralized search tools for
- ---------------------
locating Web sites in a particular industry.

Player Incentive Programs. In order to attract new players, we have instituted
- -------------------------
an initial balance credit promotion. This program is designed to attract new
players by offering a credit to new player accounts in amounts based on a
percentage of the amount of the initial deposit by the player. To attract repeat
players to the website, we institute periodic prizes, cash draws, special jack
pots, competitions and/or a frequent player program where the player would be
rewarded based on the frequency and dollar amount of play.

Development of Related Websites. We may design related websites such as a site
- -------------------------------
containing tips on how to play certain casino games or a site providing
interesting gaming news. We intend to design, develop, and promote a sports
information portal site which will feature up-to-date sports information content
including scores, statistics, news, headlines, and odds on all of the world's
major sporting events. This site will be linked to the online sportsbook to
generate traffic with the intention of enhancing revenues. Banner advertisements
would then be placed on all pages of each related website to attract players to
our Internet gaming and sports wagering websites.

Distribution of a CD-ROM. We have, in conjunction with World Gaming, produced a
- ------------------------
CD-ROM on which our casino games are contained. When an individual obtains the
CD-ROM, they are able to play all our casino games without the necessity of
wagering real money. This promotional idea is intended to give us the ability to
distribute, to a large number and variety of potential players, quality examples
of the services and products offered at its websites. Once a potential player
plays the games offered for fun, we hope that the potential player may make an
application on our websites and eventually play the same games for money. We
intend to distribute such CD-ROM's by direct mail-outs, insertions in magazines,
distributions through Internet Service Providers to their subscribers and
distributions at tradeshows.


F. INDUSTRY OVERVIEW
- --------------------

Global Gaming Industry
- ----------------------

United States of America
- ------------------------

In the U.S., Americans legally wager over $500 billion per year. This level of
legalized gambling is the result of rapid expansion in the industry over the
past decade. Since 1988, the number of states allowing casino gambling has
increased from two, Nevada and New Jersey, to 24, (including those with Native
American Casinos). At this time, only the states of Utah and Hawaii prohibit all
forms of gambling. U.S. casino revenues were projected to be about $24 billion
in 1998, reflecting an expected 6% growth from 1997, lower than the double-digit
increases earlier in the decade. Gambling in the U.S. has many forms, including
casinos, horse and dog racing, government run lotteries, riverboat casinos and
Jai Alai, all of which are highly regulated. At the present time, there is no
existing regulation of Internet gambling in the U.S. The U.S. House of
Representatives and the U.S. Senate have recently passed bills to largely
prohibit Internet Gambling by stifling the various payment mechanisms used by
U.S. gamblers to make financial deposits to offshore Internet Gambling
operators. (Also see Item 4. - L., Recent Regulatory Developments in The
Internet Gambling Industry).

International Gaming Markets
- ----------------------------

Gaming outside of the U.S. and Canada is a mixture of active markets, large and
small resort destinations, and strictly regulated, often state-run, operations.
Asia and South Africa provide the most dynamic markets and opportunities for
growth, with Latin America and the Caribbean also active in the gaming industry.
Western Europe consists mostly of mature, state-controlled markets. In
discussing the potential worldwide Internet Gaming market, it must be noted that

- --------------------------------------------------------------------------------
Annual Report - 2003                                                  Page 15
<PAGE>



                             NET FORCE SYTEMS, INC.
- --------------------------------------------------------------------------------

we have not yet done business with all of the countries and jurisdictions
discussed in the following International Market overview and we may never do
business with more than the countries we have accepted member subscriptions from
to date. For a list of countries from which we currently have registered
members, see "The Companies Products and Services" section. The following is an
overview of selected foreign markets:

Europe
- ------

There were a total of 531 European Casinos generating gross Revenues of
$5,336,971,600 US as of February 1999 (International Gaming and Wagering
Business, 1999 European Casino Report, February 1999).

The European Commission last reviewed the issue of gambling in 1991 and found no
need for EU-wide regulation. This position has remained in accordance with the
many of the EU's member states' positions that gaming, including Internet
gambling, should remain an issue for the sovereign state (Cabot, Anthony, THE
INTERNET GAMBLING REPORT III, "European Overview," by Steven Philippsohn, (Trace
Publications, Las Vegas), 1999, P.211-216). Among the member nations of the EU,
views on Internet gambling vary widely. Some states are slowly accepting the
idea of interactive gaming. For example, the Dutch government recently allowed
telephone betting, while certain European states, notably Finland and Sweden,
are allowing providers to offer Internet gambling, but only to their own
respective residents. Conversely, the German position on Internet gaming
reflects the view taken on traditional forms of gambling. That is, games of
chance are morally corrupting and should only be allowed in connection with
charitable purposes.

Countries such as France, Italy, Spain, England and Portugal are merely
monitoring Internet gambling development to see if it becomes a problem. This is
consistent with these nations' actions toward e-commerce in general, of which,
they have no immediate plans to introduce new legislation.

Prospects for growth in Europe are brightest in Scandinavia, Spain and Eastern
Europe. Sweden is setting up its regulatory system for its new casino market,
and state-sanctioned monopolies are being challenged in Norway and Finland in
the casino and machine markets. In Spain, a more relaxed regulatory climate is
emerging, and new casino operations are coming on line. Three Spanish firms
dominate this market: Cirsa/Unidesa, Recreativos Franco and Sega.

Eastern Europe continues to grow and refine is regulatory structures.
Uncertainty and prohibitions against foreign investment, however, hamper
participation by international operators. Casino Austria is a major player,
although its activity there is shrinking.

The path, which European regulation of Internet gambling is taking is more akin
to that which the Australian states are taking. The cultural differences between
European countries, however, are more marked than between the Australian states.
The consequent diversity in attitudes to gambling may slow down the process
(Steven Philippsohn, Internet Gambling, European Overview," 1998, p.215).

Asia
- ----

Large capital projects and debt levels in Australia left many casinos highly
exposed to the Asian economic crisis. Stung by a US$150 million drop in revenues
from international players, stock prices for Australia's leading casinos are now
a fraction of previous levels. The domestic market remains solid, however, and
long-term prospects are optimistic. The next year should bring the beginning of
a recovery and a more realistic assessment of the international market.

Despite the economic crisis, the casino industry in the Philippines is
experiencing the strongest expansion in the region, with three new operations
having opened in recent years. The Manila market is being reorganized and
partially privatized, providing the opportunity for change and market growth.
Three publicly traded companies are active in the Philippines casino market:
Starwood Hotels & Resorts, Malaysian-based Metroplex and Manila-based Belle Bay
Corporation. Taiwan offers the most interesting potential for change. The
government took another step toward legislation in 1998 by commissioning a
report recommending a tightly regulated industry of casinos in recreational
areas. Foreign investment would be permitted up to 40%.



- --------------------------------------------------------------------------------
Annual Report - 2003                                                  Page 16
<PAGE>



                             NET FORCE SYTEMS, INC.
- --------------------------------------------------------------------------------

Africa and the Middle East
- --------------------------

The most significant activity is occurring at opposite ends of the region. South
Africa is progressing with the transformation of its casino industry and the
opening of a route market for gaming devices. The current estimated size of this
market is US$1.5 billion, with the majority of revenues coming from casino
gaming operations (US$935 million). The Middle East market is growing in
response to the closing of gaming operations in Turkey and limited choices in
Northern Europe. With gaming illegal in Israel, further growth in border areas
is expected. New operations are expected to grow quickly in Palestine-controlled
Jericho to support public demand. In Egypt, across the border from Eilat, major
project development is underway in the Taba Heights. Additional operations have
also opened recently in North Africa, with more than the planning stages.

Latin America
- -------------

Gaming in Latin America remains decentralized and difficult for operators.
However, for patient companies with deep pockets, the market potential in the
region is large, especially in countries such as Argentina and Peru. The level
of optimism has been raised in Brazil and Mexico for gaming legislation in the
near future. Legislation in Brazil, the most populous country in Latin America,
would affect regional markets that target Brazilian players, notable Argentina,
Uruguay and Paraguay.

Sodak Gaming, International Thunderbird, Starwood, Hilton Hotels (Conrad
International), IGT and also very active, especially Recreativos Franco,
Cirsa/Unidesa and Leisure & Gaming.

Caribbean
- ---------

Although dominated by small hotel and resort-based casino operations, gaming in
the Caribbean is expanding into new areas, as well as growing in established
markets. The Bahamas offers the most substantial casinos in the region, followed
by Puerto Rico and Aruba. Casinos can also be found on other islands such as St.
Maarten, Curacao, and Antigua.


G. Internet Gambling Industry
- -----------------------------

Internet gambling offers people the opportunity to play virtual sports,
horseracing, slot machines and other casino games without the inconvenience of
leaving their home. While Internet gambling provides some amount of competition
for existing casinos, it is not a substantial threat to the traditional gaming
industry. The social aspect of gaming - the primary reason for the
transformation of the Las Vegas gaming market into a destination leisure market
- - - cannot be replicated in the artificial environment of the Internet. Most
visitors to casinos are motivated by the ambiance of the casinos, not just the
opportunity to gamble. Small markets, however, may incur negative impacts
associated with Internet gambling as these markets have been established
themselves as leisure destinations.

The popularity of gaming has transcended beyond the physical boundaries of the
casinos to the borderless and unregulated realm of the Internet. Gambling
websites, offering computer users the opportunity to wager on such games as
bingo, sports and horse wagering, poker and roulette, are beginning to thrive on
the Internet. To participate as one of these websites, the player needs only to
set up an account, typically supplying credit card information, wire transfers
or E-cash. With a click of the mouse, the player is now able to gamble. Losses
are typically deducted from the players' credit cards or established credit
line, and winnings, upon the request of the player, can be electronically
transferred or mailed to the person. Modern technology has eliminated the
physical requirement of visiting a casino or racetrack before engaging in such
games as slot machines, black jack, roulette and thoroughbred or harness racing.
With Internet gambling, patrons need not leave the comfort of their homes or
offices.

Currently, it is estimated that more than 2,000 gambling websites are offered on
the Internet, which Management estimates are owned by approximately 500
operators. With the current licensing of gambling websites by foreign
governments and increased usage of Internet services, this market will continue
to grow. It is estimated that almost 300 million people have used the Internet
as of the year 2000. With casino gambling garnering public acceptance as a form
of entertainment and Internet usage increasing, every personal home computer now
has the capacity to become a "cybercasino."


- --------------------------------------------------------------------------------
Annual Report - 2003                                                  Page 17
<PAGE>

                             NET FORCE SYTEMS, INC.
- --------------------------------------------------------------------------------

Due to pending prohibition legislation combined with a dramatically increased
rate of major financial institutions declining credit card payments for online
gambling, Wall Street analysts have recently decreased their growth estimates
for the Internet Gambling industry. Bear, Sterns Inc., scaled its 2003 estimates
down from $6.2 billion to $4.2 billion, while Christenson Capital Advisors has
cut its estimate by 5%, to $6.03 billion.

Much of the offshore wagering industry traffic is generated by Americans. See
Marc Falcone, Bear, Stearns & Co., Gaming Industry 12 (Mar. 2001). In 2000, an
estimated $1.5 billion was wagered on the Internet, of which approximately
$553.3 million was wagered on sporting events, and those amounts are estimated
to have nearly doubled in 2001; the number of websites that offer wagering is
now believed to be 1,200 to 1,400, half of which have appeared in just the last
2 years. See Falcone, supra, at 6, 48. In Antigua and Barbuda alone, there are
more than 50 on-line sportsbooks in current operation, see
http://www.tbwsport.com/bookmakers/america.html, and more than 50 jurisdictions
all over the world license and regulate sports betting websites and wagering
operations. See Mike Brunker, On-Line Gambling Goes Global, MSNBC, Apr. 10,
2001, at http://www. msnbc.com/news .

Based on industry data on the Internet Gambling industry produced by Christenson
Capital Advisors, the year 2003 estimated industry revenue was $6.03 Billion.
For the April 30, 2003 year-ended fiscal period, our total revenues did not
exceed US$ 500,000. Therefore our current position in the worldwide market is
approximately 0.0083 of one percent.


H. International Outlook on Internet Gaming
- -------------------------------------------

On May 15, 1998, European gambling regulators from 18 European countries signed
a recommendation on good practices for Internet gambling services. In the
non-binding statement, the countries agreed that European countries should be
free to regulate Internet gambling services. In addition, the countries should
ensure that Internet gambling is not used for money laundering or under-aged
gambling.

Most Internet gambling websites are located in the Caribbean and South America,
along with other sites in Australia, South Africa, the Netherlands and New
Zealand. The Caribbean governments charge Internet "casino" operators up to
$100,000 annually for a license and require operators to post bonds. In Antigua,
the government requires the employment of local residents and payment of
education taxes. The governments of Liechtenstein and Finland operate their
national lottery via the Internet.

In April of 2001, Australia introduced bill 1062 to ban internet gambling within
                  ---------                 ----
Australia and certain other countries. This bill passed in July of 2001, meaning
that there is no internet gambling within Australia. There are two main
prohibitions under the Act. First, there is a general prohibition on both
Australian and foreign persons from providing interactive gambling services to
customers in Australia. Second, Australian-based interactive gambling services
are prohibited from providing interactive gambling services to customers in
certain designated countries. The list is very short (and does not include the
USA). As a result, many internet casinos actually set up shop in some of the
island-states (i.e. Tasmania) and actively take bets from all over the world, at
the same time complying with the laws of the Act.

Sports betting on the internet in Great Britain is prolific and regulated by the
                                  -------------
government. Large Multinational corporations (including Rupert Murdoch's British
Sky Broadcasting) are involved in online sports betting. On March 7, 2001,
Chancellor Gordon Brown proposed in the budget to eliminate the current 6.75%
tax on all sports bets placed. He also proposed to replace the tax with a 15%
corporate tax on the gross profits of the bookmaker. Britain has recently made
it easier for entrepreneurs to start an online sportsbook business, provided
they have the minimum capital requirements. For these reasons, more companies in
this industry are considering to move or begin their operations in the United
Kingdom. This is one of the fastest growing regions of the world for I-gaming
companies.

As of May 31, 2002, online gambling in Hong Kong is illegal. The Home Affairs
                                       ---------    -------
Bureau is responsible for formulating gambling policy and monitoring its
implementation. Hitherto, the gambling policy is to restrict gambling
opportunities to a limited number of authorized and regulated outlets. At
present, such authorized gambling outlets include horse racing organized by the
Hong Kong Jockey Club (HKJC), the Mark Six Lottery organized by the Hong Kong
Lotteries Board and gaming activities authorized by the Commissioner for
                                                        ----------------
Television and Entertainment Licensing (CTEL) (e.g. mahjong parlors). Under the
- ---------------------------------------------
Gambling Ordinance (Cap. 148), all gambling activities are illegal except those
expressly authorized by the Government under the Betting Duty Ordinance (Cap.

- --------------------------------------------------------------------------------
Annual Report - 2003                                                  Page 18
<PAGE>

                             NET FORCE SYTEMS, INC.
- --------------------------------------------------------------------------------

108) (i.e. the HKJC horse racing and the Mark Six Lottery), those licensed by
the CTEL (e.g. mahjong parlors) and those exempted under Section 3 of the
Gambling Ordinance (mainly social gambling).


I. Competition
- --------------

The online commerce market is new, rapidly evolving and intensely competitive,
and we expect that competition will further intensify in the future. Barriers to
entry are minimal, and current and new competitors can launch new sites at a
relatively low cost. Management estimates that there are over 2,000 online
gaming and related sites in operation today with potentially thousands more
"affiliate" sites. . However, the majority of these sites do not produce
substantial revenues as compared to the established, brand name sites, whose
operators have invested heavily in their marketing, affiliate, and customer
service programs to continuously increase their customer bases and maximize
customer retention. Some of the more established Internet Gaming sites that
provide similar gaming services as Netforce Entertainment's web sites and that
the Company has identified as its competitors include http://globalinteract.com,
http://www.intertops.com/, http://www.playersonly.com/,
- -------------------------  ---------------------------
http://www.goldclubcasino.com/, http://www.intercasino.com/,
- ------------------------------  ---------------------------
http://www.englishharbourcasino.com/, http://www.usacasino.com/,
- ------------------------------------  -------------------------
http://www.thesandscasino.com/, http://www.betonsports.com/,
- ------------------------------  ---------------------------
http://www.sportingbet.com/, http://www.wwts.com/, and http://www.poker.com/.
- ---------------------------  --------------------      ---------------------

In addition, the broader gaming industry is intensely competitive. We compete
with a variety of companies, including (i) online vendors of gaming and gaming
related products, (ii) online service providers which offer gaming products
directly or cooperation with other retailers, (iii) traditional providers of
gaming products, including specialty gaming providers, and (iv) other retailers
that offer gaming products. Many of these traditional providers also support
dedicated websites, which may compete directly with us.

We believe that the principal competitive factors in our online market are brand
recognition, selection, variety of value-added services, ease of use, site
content, quality of service, technical expertise and product availability. Many
of our intended and potential competitors have longer operating histories,
larger customer bases, greater brand recognition and significantly greater
financial, marketing and other resources than us. We are aware that certain of
our proposed competitors have and may continue to adopt more aggressive pricing
or marketing policies and devote substantially more resources to website and
systems development than us. Increased competition may result in reduced
operating margins, loss of market share and a diminished brand franchise.

There can be no assurance that we will be able to compete successfully against
intended and future competitors. New technologies and the expansion of existing
technologies may increase the competitive pressures of the Company. There can be
no assurance of the economic success of any marketing effort by us since the
revenues derived from the Internet casino gaming and sports wagering websites
depend primarily upon the site's acceptance by the international public, which
cannot be predicted with certainty. To be ultimately successful, we will be
faced with the challenge of marketing our gaming websites to a variety of
foreign cultures. Our websites will compete for consumer acceptance with similar
websites hosted by other companies. As a result, the success of our marketing
efforts is dependent not only on the quality and acceptance of the our virtual
casino games and on-line sports wagering websites, but also on the acceptance of
other competing virtual casino games and websites offered in the marketplace
during the same time period.


J. Description of Property
- --------------------------

The Company occupies 240 square feet of commercial office space at Suite
#10-Epicurean, , Friars Hill Road, Woods Centre, St. John's, Antigua, West
Indies. This office houses our operations including workstations for four
individuals engaged in customer support, production, marketing, website
development, and accounting, and administration functions. All gaming
transaction servers website hosting facilities are physically housed and
maintained by World Gaming's co-location facilities in Antigua. The building in
which we leased space is in the heart of St. John's and is home to several other
Technology and Internet based companies. This arrangement and proximity to other
similar companies is expected to lend itself well to promoting the Company as
being in the right area and on the leading edge of technology. As well, our
offices are in close proximity to banking services, the post office, money
transfer services, courier services, and other essential business service
providers and their offices.

- --------------------------------------------------------------------------------
Annual Report - 2003                                                  Page 19
<PAGE>



                             NET FORCE SYTEMS, INC.
- --------------------------------------------------------------------------------

The terms of the Woods Centre office lease are as follows: We currently lease
240 square feet of office space on a month-to-month basis allowing for
flexibility to expand to larger office space in the same complex should the need
arise. The annual rent is $8,400 USD.


K. Government Regulation
- ------------------------

In July 1998, the U.S. Senate voted to largely prohibit gambling on the
Internet. Under the legislation, operators of illegal Internet gambling sites
could be sentenced to up to four years in jail and fined up to $20,000. Gamblers
who illegally bet via the Internet could receive a jail sentence of up to three
months and a fine of either $500 or three times the amount of the bet. Some
Internet-based "fantasy" or "rotisserie" sports league activities would be
exempt from the ban. However, in August 1998 the U.S. House of Representatives
overwhelmingly voted down the legislation. Recent efforts on the part of the
federal government to ban Internet gambling is a departure from previous
gambling policy. The federal government has typically left the issue up to the
authority of the state governments, resulting in a wide range of attitudes
towards gambling. Most states allow some type of gambling whether it be full
casinos, card rooms, pari-mutuel tracks or state-operated lotteries. Only two
states, Hawaii and Utah, prohibit all forms of gaming.

While passage of the Internet prohibition laws in the future are possible, in
one form or another, practical enforcement of the law is a separate matter. The
Internet is a global information and communications medium operating without
boundaries. Due to the global nature of this medium, no regulatory agency has
control over the content of information accessible to users. The inability of
governments to regulate materials it deems offensive or illegal results in
political and social frustration. Measures to remove offensive materials, such
as those classified as containing adult content, have been unsuccessful to date.
The same enforcement problems will be encountered with gambling sites. These are
three avenues through which law enforcement officials may attack the problem:
the gaming website, the ISP or the user. The enforcement of anti-Internet
gambling laws through each of the avenues presents interesting social and
technological problems.

In the United States, the ownership and operation of land-based facilities has
traditionally been regulated on a state-by-state basis. According to a recently
published industry report by Bear Stearns, the Federal Government's role in
regulating gambling appears to be changing. Increased Federal interest may not
result in new regulations for the traditional forms of gambling that are easily
subject to police power of the individual states, may result in a redefined role
for the Federal Government in dealing with Internet gaming. The U.S. Department
of Justice has maintained that, technically, there are no specific U.S. Federal
provisions against placing of bets overt the Internet. However, the Justice
Department also maintains that it is illegal to operate Internet Gaming Websites
and servers from within the United States. We are not physically located in the
United States nor do we house any computer servers or other such computer
hardware within the United States.

The United States Federal Wire Act contains provisions that make it a crime for
anyone engaged in the business of betting or wagering to knowingly use telephone
wires to transmit bets or wagers or information assisting in the placing of bets
or wagers on any sporting event, unless the wagering is legal in the
jurisdiction from which, and into which, the transmission is made. There are
other Federal laws impacting gaming activities, including the Wagering
Paraphernalia Act, the Travel Act, and the Organized Crime Control Act. However,
it remains unresolved whether these laws apply to gaming conducted over the
Internet. All aspects of our operations specifically involve the Internet for
delivery of our online gaming support services. We do not operate a telephone
wagering facility for the purpose of accepting and booking bets on sporting
events.

March 4, 1998 marked the first federal prosecution for gambling on the Internet
as 21 American gambling site operators were charged with conspiring to illegally
transmit bets over the Internet and the telephone. The men were owners or
managers of eight Caribbean and Central American-based companies that accepted
telephone and Internet wagers on sporting events. The individuals were charged
with felonies under the Wire Act, which explicitly prohibits placing sports
wagers over State lines via telephone wire. However, the Wire Act does not
directly identify or address the use of the Internet with its logistical factors
including the question of global borders and jurisdiction as it relates to where
a wager is actually received and/or processed. The common factor in all of the
operators indicted was the fact that all were clearly directly accepting and
booking sports wagers via telephone lines from the U.S. Only one of these
indictments resulted in a trial. Jay Cohen took the matter to trial and was
convicted of seven counts of violating the Wire Act and one count of conspiracy.
Mr. Cohen received a $5,000 fine and a 21-month prison sentence. In June of


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Annual Report - 2003                                                  Page 20
<PAGE>



                             NET FORCE SYTEMS, INC.
- --------------------------------------------------------------------------------

2002, Mr. Cohen's appeal to the U.S. Supreme court was rejected and he must
serve the full sentence.

The only known federal case against an Internet gambling operator prior to the
March 1998 federal prosecutions involved the Interactive Gaming and
Communications Corporation in Pennsylvania. The company operated a virtual
gambling operation in Grenada, which reportedly handled over $58 million in
wagers. In February 1997, FBI agents seized company records and froze company
assets. ("Can Lawmakers Control Online Gambling?" New York Times, Peter Lewis,
September 22, 1997). The company is also involved in legal issues with the state
Attorney General's Office. No formal charges were filed by the Department of
Justice, although the company eventually sold its gambling assets to a
Canadian-based company.

The following are excerpts from an article by Fred Faust of Rolling Good Times
Online entitled "U.S. Judge Backs Visa and MasterCard in Internet Gambling
                 ---------------------------------------------------------
Ruling", submitted on March 12, 2001. This article highlights an important
- ------
federal ruling:

More than 11 federal cases against the credit card companies and several of the
issuing banks were consolidated and assigned to Judge Stanwood R. Duval Jr. in
New Orleans. The plaintiffs were people who lost money gambling online. If the
casinos had not accepted credit cards, the plaintiffs argued, they wouldn't have
gambled online. On Feb. 23, (2001) Duval dismissed the cases outright, before
they even got to trial. That's an unusually strong step for a judge, but Duval
ruled that the plaintiffs had no grounds to bring these cases. Perhaps more
significantly, he also ruled that Internet casinos do not violate federal law.
"Plaintiffs in these cases are not victims," the judge stated in his ruling. "At
this point in time, Internet casino gambling is not a violation of federal law."
In an opinion shared by many lawyers, Duval ruled that the 1961 federal Wire
Act, under which telephone and Internet bookmaker Jay Cohen was convicted,
applies only to sports betting and "does not prohibit Internet casino gambling."

In addition to the aforementioned regulations pertaining specifically to gaming,
we may become subject to any number of laws and regulations that may be adopted
with respect to the Internet in general as the Internet becomes widely used.
These laws may cover issues such as user privacy, freedom of expression,
pricing, content and quality of services, taxation, advertising, intellectual
property rights and information security. Furthermore, the growth of online
commerce may prompt calls for more stringent consumer protection laws. Several
states have proposed legislation to limit the uses of personal user information
gathered online or require online services to establish privacy policies. The
Federal Trade Commission has also initiated action against at least one online
service regarding the manner in which personal information is collected from
users and provided to third parties.

Management does not contemplate providing personal information regarding our
customers to third parties. However, the adoption of additional consumer
protection laws could create uncertainty in Web usage and reduce the demand for
our products and services.

We are not certain how our business may be affected by the application of
existing laws governing issues such as property ownership, copyrights,
encryption and other intellectual property issues, taxation, libel, obscenity
and export or import matters. The vast majority of these laws were adopted prior
to the advent of the Internet. As a result, they do not contemplate or address
the unique issues of the Internet and related technologies. Changes in laws that
are intended to address these issues could create uncertainty in the Internet
market place. This uncertainty could reduce demand for our services or our cost
of doing business may increase as a result of litigation costs or increased
service delivery costs.

In addition, because our services are intended to be made available over the
Internet in multiple foreign countries, other jurisdictions may claim that we
are required to qualify to do business in that foreign country. We intend to
qualify to do business only in Antigua and Barbuda. Our failure to qualify in a
jurisdiction where it is required to do so could subject us to taxes and
penalties. It could also hamper our ability to enforce contracts in these
jurisdictions. The application of laws or regulations from jurisdictions whose
laws do not currently apply to the business could have a material adverse effect
on the business, results of operations and financial condition




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Annual Report - 2003                                                  Page 21
<PAGE>

                             NET FORCE SYTEMS, INC.
- --------------------------------------------------------------------------------

L. Current Internet Gambling Enforcement
- ----------------------------------------

Recent Regulatory Developments in the Internet Gambling Industry
- ----------------------------------------------------------------


On March 13, 2003, Congressman Conyers from the US House of Representatives
introduced HR 1223 (also known as the "Internet Gambling Licensing and
           -------
Regulation Commission Act"). The first of such bills introduced to the US House
of Representatives, it proposes creating a 12 month commission to study the
possibility of regulating internet gambling in the USA. What is important is
that no less than 18 months after the act is passed can US Congress make any
changes to the existing laws regarding internet gambling. The governments major
concerns are (1) that minors will be prevented from Gambling online and (2) the
money generated from Internet Gambling will not be used for money laundering and
terrorism. The bill is currently in committee.


Around the same time as Conyers was introducing his bills, On January 7, 2003,
the US House of Representatives introduced HR 21 (also known as the "Unlawful
                                           -----
Internet Gambling Funding Prohibition Act"), proposed legislation to amend the
Wire Act of 1961 (Title 18 of the US Code) to cover internet wagering as well.
- ----------------
The US Senate on March 13 introduced a similar bill, S 627. Both S627 and HR21
                                                     -----
define illegal gambling and acts to prevent monetary commerce for "unlawful"
gambling purposes by making unlawful financial transactions for gambling in both
an online and wireless environment where no legislation exists. HR 21 is similar
to HR 556 (also known as the "Leach-LaFalce Act") and HR 2579. Both were
   ------                                             -------
submitted in 2001 and failed in 2002 as they were not voted on in the US Senate
during that year.

On June 11, 2003, HR 2143 was passed in the House of Representatives. On July
31, 2003, the Senate Banking Committee passed S.627, the Internet Gambling
prohibition bill proposed by Sen. Jon Kyl, R-Ariz. The bill was unanimously to
be reported to the full Senate. Kyl's bill will block online gambling merchants
from taking credit cards or other bank instruments as payment from American
online gamblers. Changes to the bill adopted on the day of the vote eliminate an
exemption for state-sanctioned betting operations that is included in the House
version.

The Senate amendments continue to allow wagers on horse and dog racing on secure
"closed-loop" systems or private networks that require gamblers to subscribe to
the system, verify their ages and assure that they are in a state or American
Indian reservation where the form of gambling is legal.

Our Internet operations and corporate structure are structured in such a fashion
that we do not directly process wagers and facilitate payments of betting
customers, nor do we accept wagers via the telephone on sporting events.
Further, we do not physically operate within the boundaries of the United
States. Therefore, we are of the view that we are not in violation of or
specifically subject to the Wire Act of 1961 or future laws that may result from
regulatory bills recently passed in the U.S. House of Representatives as well as
the U.S. Senate. However, this may not preclude the United States or other
jurisdictions from initiating criminal or civil proceedings against us and these
proceedings could involve substantial litigation expense, penalties, and fines.
In addition, these proceedings may divert the attention of our key executives,
and may result in injunctions or other prohibitions against us. These
proceedings could have a material adverse effect on the business, revenues,
operating results, and financial conditions.


ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
- ----------------------------------------------------

Forward Looking Statements
- --------------------------

Some of the information in this section contains forward-looking statements that
involve substantial risks and uncertainties. You can identify these statements
by forward looking words such as "expect", "anticipate", "believe", "seek",
"estimate" and similar words. Statements that we make in this section that are
not statements of historical fact also may be forward looking statements.
Forward looking statements are not guarantees of our future performance, and
involve risks, uncertainties and assumptions that may cause our actual results
to differ materially from the expectations we describe in our forward looking
statements. There may be events in the future that we are not accurately able to
predict, or over which we have no control. You should not place undue reliance
on forward looking-statements. We do not promise to notify you if we learn that
our assumptions or projections are wrong for any reason. We disclaim any
obligation to update our forward-looking statements. See "Risk Factors" for more
information.

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Annual Report - 2003                                                  Page 22
<PAGE>



                             NET FORCE SYTEMS, INC.
- --------------------------------------------------------------------------------

The following discussion should be read in conjunction with our consolidated
financial statements and the related notes appearing at Schedule "A" in this
annual return.

Plan of Operations
- ------------------

Revenues and Financing
- ----------------------

Our principal source of revenue for the fiscal period ended April 30th, 2003,
was generated from our operating subsidiary, Netforce Entertainment, Inc.
Netforce Entertainment Inc. is a gaming company, which oversees Internet
wagering websites. It is anticipated that the Internet will continue to become
more accessible and that the market opportunities for us will continue to
expand. This tremendous growth will also attract many potential new competitors.
In order to maintain revenue growth, we intend to expand the content and to
improve the services on the Internet websites on a global basis, as well as
researching and developing other projects that will utilize our existing
facilities and expertise.

Revenue Generation Process. Revenues for the Company were generated each time a
customer makes a wager on the website. Net monthly revenues are calculated as
the total dollar amount wagered by customers in the virtual casino and/or the
sportsbook wagering website less winnings by customers in the virtual casino
and/or sportsbook wagering website for a given calendar month. The software
royalty fee and transaction processing fees are included in the cost of sales.
Transaction processing fees consist of credit card discount fees of 5.50 % per
deposit, $1.60 per transaction, $5.00 fee for each check processed, and a $25.00
fee to process each credit card chargeback. As well, deposit bonus credits used
to encourage customer deposits are also included in cost of sales. See Exhibit
10.1, Software License Agreement, Section 2.3 Financial Transactions, and
Schedule A.

Netforce Entertainment Inc. does not directly process player deposits and
winnings. Electronic Financial Services Caribbean, Inc., the transaction
processing subsidiary of World Gaming, is under contract to Netforce
Entertainment to process all deposits and credits on behalf of the Company's
gaming websites. Daily online activity reports of all financial transactions are
produced by Electronic Financial Services Caribbean, Inc. These reports include
an account summary and an exposure report. The account summary details dollar
amounts deposited and withdrawn for each individual customer account for the
date queried. The exposure report provides an actual detailed breakdown of the
total dollar amounts wagered (i.e., total bets) and total winnings (i.e.,
payouts to winners of successful wagers) by each specific casino game played and
by each sports wagering type and event. The net amount (i.e., wagers less
payouts) is recognized as revenue. Electronic Financial Service Caribbean, Inc.
produces a monthly summary report of total net monthly revenue (i.e., total
dollar amount wagered less winnings) less transaction processing fees less
calculated software licensing fees (i.e., a percentage of net revenues
calculated according to the terms of the Software Licensing Agreement attached
hereto as an Exhibit).

We have been funded to date through debt financing from private arm's length
lenders. The Company has secured approximately $495,000 US through debt
financing. The sum was received by us pursuant to a note payable dated July 13,
1999 payable to Mountain High Management Inc. The loan was unsecured, with
interest at the rate of 15% per annum and was due on July 29, 2001. The Company
received the sum on or about July 13, 1999.

On June 1, 2000, pursuant to Regulation S, the Board authorized the issuance of
2,500,000 Units comprised of one (1) $0.001 par value common stock and one (1)
warrant that allows the holder to purchase one (1) share of the Company's $0.001
par value common stock at an exercise price of $2.00 per share, to be exercised
no later than December 31, 2002 after which the warrants would become null and
void. Each Unit was offered at the price of $0.10. This offering was sold out on
or about June 30, 2000.

Subsequent to the due date of July 13, 2001, the promissory note was acquired
from Mountain High Management Inc. by IFG Investments Inc. On September 15,
2001, Netforce Systems Inc. entered into an agreement with IFG Investments Inc.
to convert the total principal and accrued interest on the note to equity at a
value of $0.10 per share for a total of 6,027,870 shares issued. Related-party
unsecured shareholder loans with an interest rate of 8.0% made by Geneva
Overseas Holdings Ltd. totaled $208,121 as at September 15, 2001. Geneva
Overseas Holdings Ltd. is controlled by the President of Net-Force Systems Inc.,
Terry G. Bowering. On September 15, 2001, Net-Force Systems Inc. entered into an
agreement with Geneva Overseas Holdings Ltd. to convert the principal plus
accrued interest of $214,483 of the loan to equity at a share value of $0.10 per

- --------------------------------------------------------------------------------
Annual Report - 2003                                                  Page 23
<PAGE>

                             NET FORCE SYTEMS, INC.
- --------------------------------------------------------------------------------

share for a total of 2,144,830 shares issued. On November 20, 2000, Net-Force
Systems Inc. issued a promissory note for $50,000 with interest rate of 8.0% to
Low Tide Investments Inc. On September 15, 2001, Net-Force Systems Inc.
converted the loan payable plus accrued interest to Low Tide Investments Inc. to
equity at a value of $0.10 per share for a total of 533,333 shares issued. (See
Financial Statements, Note 6 - Stock Transactions and Note 11 - Subsequent
Events).

Management believes that the reduction of total long-term debt burden to zero
combined with existing cash resources and ongoing revenues from operations will
enable the Company to meet its financial obligations for the next 12 months. No
assurance can be given that revenues from gaming activities and/or proposed
secondary revenues will enable us to meet our financial obligations. As such, we
may solicit and arrange for additional debt financing from private arm's length
lenders in the event existing financing and revenues do not meet our financial
obligations. In addition, we may consider raising additional equity financing
through the sale of common stock of the Company through private placements to
sophisticated investors. The combination of existing financing, expected
revenues from operations and additional debt and/or equity financing is intended
to provide us with sufficient operating capital for a period of approximately
two years.

Historical Expenditures. Historical expenditures up to the period ending April
30, 2003 have consisted primarily of monthly expenditures for such costs as
office overhead, office rent, utilities, marketing expenditures, wages, ongoing
web-site design and maintenance, and accounting services. A major expenditure
has been the cost of seeking to obtain a public listing for the company. Costs
of going public include legal expenses, consultants' fees, auditing services,
and general public listing filing fees. The period consisted of comparatively
less expenditures on organizational/set-up costs such as office leasehold
improvements, security deposits for rent, utilities, and licenses, financing
costs, and legal services.

Payments to be made to World Gaming for the gaming software are comprised of the
following 2 components:

     1.   Payment for the software: a one-time US$100,000 fee for the set-up and
          ---------------------------------------------------
          configuration. This fee includes all future versions and upgrades of
          the software at no additional cost.

Actual payments made by Netforce Systems Inc. to Softec Systems to date consist
of a deposit of US$ 10,000.00 upon the signing of the software agreement. This
payment was the first installment of the total US$100,000.00 one-time software
set-up and configuration fee. The balance of payments as detailed in the
software agreement called for the balance of US$90,000 to be paid in monthly
installments @ US$10,000 until fully paid. The payment schedule for the software
commenced on the date of `live' operations, the design and testing of the gaming
website is complete and the first wager. That date was April 7th, 2000.
Subsequent to this date, during the three months of operations after the launch
date, a number of software configuration problems were experienced which
substantially stifled customer acquisition. As compensation, Starnet
Systems/World Gaming agreed to reduce the balance of payments due for the
one-time setup and configuration fee to zero. Consequently, no further payments
were made under the software agreement in fiscal period 2001, 2002 and 2003.

     2.   Ongoing royalty payments to World Gaming consisting of a percentage of
          ----------------------------------------
          the net revenue generated on a monthly basis. As detailed in the
          software agreement, these payments will begin upon commencement of
          live operations of the gaming website. The schedule of royalty
          payments payable to World Gaming as detailed in Schedule "A" of the
          software agreement is as follows:

         *Net Monthly Revenue (US$)                Royalty Fee Payable
         0 to < or = $500,000                            25%
         $  500,000 to < = $1,000,000                    20%
         $1,000,000 to < = $5,000,000                    15%
         $5,000,000    < = $10,000,000                   12.5%
         $10,000,000 plus                                10%

          *Net Monthly Revenue is calculated as the total dollar amount wagered
          in the virtual casino and/or the sportsbook wagering site LESS
          winnings in the virtual casino and/or sportsbook wagering site LESS
          transaction processing fees, for a given calendar month.

     3.   Payment Processing Agreement: Section 2.3.1 of the software agreement
          ----------------------------
          states: "Softec shall provide a transaction processing system that
          will allow the licensee's customers to deposit funds for use of the
          Games (the "Transaction Processing System").". Deposits are made


- --------------------------------------------------------------------------------
Annual Report - 2003                                                  Page 24
<PAGE>

                             NET FORCE SYTEMS, INC.
- --------------------------------------------------------------------------------

          electronically by Visa or Mastercard credit cards and by other methods
          such as bank wire transfer and bank draft. This transaction processing
          system is provided by Electronic Financial Services Caribbean Inc.,
          wholly owned subsidiary of World Gaming. Electronic Financial Service
          Caribbean, Inc. will also facilitate payouts of winnings for the
          licensee by processing credits to credit cards and by bank draft.

As stated, actual cost to the company for payment processing include transaction
fees of 5.50 % and a flat fee of US$1.60 per transaction. As well, there is a
monthly 10% rolling reserve held which is rolled back to the licensee after 180
days. This deposit reserve is required to offset any credit card chargebacks
that may occur. Finally, there is a US$5.00 charge for each bank draft that is
processed for payouts of winnings.

A significant trend in expenditures in this industry of note, relate to
marketing expenditures and its direct relationship with net revenues generated.
Marketing expenditures are a variable cost, so it is anticipated that as these
expenditures are increased revenues will respond as a direct result, further
enhancing the company's liquidity. It is important to note that the revenues
generated are entirely of a cash nature as no credit is extended to customers.
Therefore since there are no customer receivables generated of a material
nature, there is no need to establish an allowance for doubtful accounts. Any
accounts receivable carried on the balance sheet consists of monthly net
revenues payable by Electronic Financial Services Caribbean Inc. and World
Gaming Plc. Typically net revenue is due and payable at month-end but not
actually paid until the 15th of the following month. As was stated in the
previous paragraph, EFS Caribbean Inc., the credit card transaction processor,
maintains a 10% rolling reserve hold on credit card deposits on behalf of the
company. These reserved funds are released after a 180-day period on a monthly
rolling basis. EFS had increased the rolling reserve to 10% of deposits from 5%
to allow for a slightly increased level of credit card chargebacks
industry-wide.

For the twelve-month period ended April 30, 2003, Net-Force Systems Inc.
recorded revenues of $288,613, a decrease of 44% as compared to revenues of
$519,237 for the previous fiscal period ended April 30, 2002. The primary reason
for the decline in revenues for the period was the decision by most of the major
credit-card companies and banks to block online gambling transactions on their
own. American Express, Citigroup Inc., Bank of America Corp., MBNA Corp., and
other credit-card issuers that together control more than 80 percent of the
market no longer allow payments to gambling sites. Other major payment services
such as PayPal have blocked transactions for online gambling as well.

Our revenues are directly dependent on the amounts of funds deposited by our
customers. A substantial portion of these deposits are made by credit cards. As
stated above, many issuing banks of major credit cards (i.e., Visa and
MasterCard) such as MBNA, Bank of America, Chase Manhattan Bank and Citibank
over the last year have announced that they will decline authorization to U.S.
persons who try to use their credit cards for online gaming. Non-U.S. Banks
processing the online gaming transactions can become targets of U.S. criminal
proceedings under the newly enacted Patriot Act. The jurisdiction of the United
States, under the Patriot Act, now extends to all non-U.S. banks that have
correspondent accounts in the United States. The United States can freeze the
non-U.S. bank's U.S. correspondent account, if that bank is processing U.S.
gaming transactions or holding operating funds or the profits of an operator
accepting U.S. wagers, because the U.S. Department of Justice currently views
all offshore gaming funds as tainted, and all offshore gaming as illegal. This
creates a serious disincentive to the banks to process online gaming
transactions which adversely impacted our revenues over the last year of
operation.

Additionally, many banks currently will not process transactions with the
industry code for Internet gaming when the credit card is not physically
presented to the merchant, due to the perceived increased risk of charge-backs
by end users for reasons including card sequencing and unauthorized use of
credit card. If additional issuing banks also decide not to process such
transactions, this will make it more difficult for customers to deposit funds
for betting. This will most certainly have a negative effect on our revenues.

Gross margin for the period was 26.4% versus 46% for the previous period, due to
significant decrease in total sales combined with an increase in affiliate
commission payouts over previous periods. This negative change in gross margin
was a direct result of the current policy of major U.S. banks and financial
institutions towards online gambling, with regard to declining online gambling
credit card transactions of their card-issued customers.

Total expenses, including General and Administrative expenses, Depreciation and
Amortization, and Interest expense, were $201,732 for 2003 versus $411,423 for
2002, a decrease of 51% year over year. Due to the reorganization and
elimination of long- term debt and total liabilities on the balance sheet during
the previous fiscal period, interest expense on notes payable decreased from
$34,141 in 2002, to $1,537 in 2003, a %95 decrease. The total annual net loss

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Annual Report - 2003                                                  Page 25
<PAGE>

                             NET FORCE SYTEMS, INC.
- --------------------------------------------------------------------------------

for the period was ($125,564) versus a total net loss of ($174,206) in period
ended April 30, 2002, representing a decrease (improvement) of 28%. Advertising
and marketing costs have been significantly reduced compared to previous periods
as we anticipate a future exit from the Internet Gambling industry due to
increasing regulatory pressures in the U.S. Most of the major initial costs of
obtaining a public listing such as legal fees, consulting fees, filing fees,
accounting and auditing fees, for the company have been expended in the most
recent period ended April 30, 2003, and the previous fiscal period. We have
obtained a trading symbol from the NASD on February 21st, 2003 (NTFSF) which
increases the marketability of our common shares for our existing shareholders
and enhances greatly our opportunities for future equity financings. Other than
the ongoing reporting requirements and associated costs, we do not expect that
costs associated with the public listing will affect results from operations in
the next fiscal period 2004, as has been the case in past periods.

Our gross margin tends to fluctuate from period to period. There are two primary
factors that influence our cost of sales, which in turn affects the gross margin
from period to period. First, we use deposit bonus credits in promotions in
order to generate new member signups and to encourage customer deposits. Bonus
credits given are typically 10% to 20% of the customer's deposit and will vary
from period to period depending on the promotion and season of the year. Higher
deposit bonus credits result in a higher cost of sales. Second, the credit card
charge back rate varies from period to period which can adversely affect the
gross margin. As a result of more efficient fraud controls undertaken by the
transaction processor, Electronic Financial Services Caribbean Inc., the most
recent financial quarters showed a much lower rate of credit card chargebacks
than previous fiscal periods. However, as stated, we have experienced increased
credit card declines due to the major banks refusing to accept transactions for
their card-issued customers who attempt to make payments to online gambling
operators. As a result, our revenues derived from credit card deposits have been
significantly adversely impacted.

The afore-mentioned revenues and operating expenses primarily resulted from
Discontinued Operations. On June 3, 2003, we disposed of our operating
subsidiary, Net-Force Entertainment Inc. See Subsequent Events in Note 11 to the
Consolidated Financial Statements for a summary of the Discontinued Operations
for the years ended April 30, 2003, 2002, and 2001.

Operations for the Next Twelve Months
- -------------------------------------

Our primary on-line wagering website, www.aogaming.com, went live on the
                                      ----------------
Internet on April 7th, 2000. Since that time, the Web site has gone through
several changes, re-designs, and upgrades as management had deemed necessary as
a result of evolving customer needs and competitive influences. The gaming
website customer database has grown steadily from the initial launch date.
However, to continue to grow our gaming websites' customer traffic, member base
and revenues, and to stay viable in the current competitive and regulatory
environment, we will need to increase our investment in marketing expenditures
to target global markets.

We may therefore find it necessary to raise additional funds as is deemed
necessary by management through private placements of stock issued out of our
treasury to individuals or corporations who have expressed interest in obtaining
stock in the Company. To ensure the ongoing viability of Netforce Systems Inc.,
we plan to raise additional capital through a private placement equity issuance
and engage in a viable merger transaction with a private or public company with
an established revenue and earnings profile during the second or third quarter
of fiscal period 2004. However, we can give no assurance of our success in
finding and acquiring a viable entity that will ultimately ensure our
profitability in the fiscal period ended April 30, 2004..

On June 1st, 2003, through an Extraordinary Shareholders Resolution dated June
1st, 2003, Net-Force Systems Inc. approved the sale of all of the 100 issued
shares of Net Force Entertainment Inc., the operating subsidiary of Net Force
Systems Inc., for total proceeds of $100.00 plus the assumption of debt, to
Geneva Overseas Holdings Ltd., a British Virgin Islands Corporation. The company
no longer has any control over Net-Force Entertainment Inc. This event signifies
Net-Force Systems Inc.'s official exit from the Internet Gambling Industry. See
Subsequent Events in Note 11 to the Consolidated Financial Statements for a
summary of the Discontinued Operations for the years ended April 30, 2003, 2002,
2001.

On June 3rd, 2003, Net-Force Systems Inc. created a new subsidiary named
Atlantica Resorts Ltd., in the jurisdiction of the territory of the British
- ---------------------
Virgin Islands pursuant to the International Business Corporations Act. The
purpose of this corporation is to pursue opportunities in the resort properties
marketing industry in the Caribbean. The company intends on utilizing its
management and business experience in the Caribbean region combined with its
Internet marketing expertise to capitalize on opportunities available in the

- --------------------------------------------------------------------------------
Annual Report - 2003                                                  Page 26
<PAGE>

                             NET FORCE SYTEMS, INC.
- --------------------------------------------------------------------------------

tourism industry. During the second or third quarter of fiscal period 2004, the
company intends to make a test-market acquisition of a small resort hotel of
between 10 to 25 rooms. We will then intend to enter the large and growing
time-share industry with these types of properties. Specific Caribbean region
islands that management will target include Antigua and Barbuda, Sint.
Maarten/St. Martin, Dominica, St. Kitts, St. Lucia, as well as certain resort
areas in the Dominican Republic.

A number of studies have demonstrated a strong interest in the Caribbean as a
foreign destination of interest for United States consumers considering a
timeshare purchase. In fact, according to the Future Timeshare Buyers: 2001
Market Profile, the latest research of prospective purchasers commissioned by
Interval International, the Caribbean is ranked as the top foreign destination
among consumers considering a timeshare purchase. When considering destinations
in which they might like to purchase timeshare, 64 percent of consumers would
consider purchasing in the Caribbean. The 2001 Market Profile project was
developed from data collected in the Yesawich, Pepperdine & Brown/Yankelovich
Partners 2001 National Leisure Travel Monitor, a strategic marketing tool for
the travel and leisure industry. Market research also indicates that 14 percent
of pleasure travelers, about 11.3 million people, are interested in purchasing
timeshare in the next two years. Only five percent of this total market has been
penetrated. Because vacationers have paid for their lodging in advance,
timeshare has proven more resilient to economic downturns and international
tension, such as the September 11 event, than other leisure sectors, and it is
anticipated the industry will hold its own in the intermediate future. The
timeshare industry as a whole has enjoyed a double-digit annual growth rate
during the past two decades. Today, there are more than 5,100 resorts in 110
countries around the world, with annual sales estimated at nearly $7 billion.
Public interest is rising as travelers learn about the flexibility of timeshare;
the variety of products offered at different price ranges and the innovative
programs and services introduced each year.

Barbados Travel News (Press Release July 15, 2003): The Caribbean's tourism
industry is showing signs of recovery after two difficult years, according to
figures released by the Caribbean Tourism Organization (CTO), in its quarterly
publication, Key Tourism Statistics (Keystats). "Caribbean tourism now appears
to be past the lowest point of the downswing and the numbers coming in from
member countries show that there are signs of recovery," said Jean Holder,
secretary general of the CTO. Stayover arrivals to the region increased by an
estimated seven percent during the winter of 2003 over the same period last
year. The Caribbean registered increases of around seven percent from the United
States; 21 percent from Canada and six percent from the European market for the
winter of 2003.

Travel and tourism makes up 5 percent of global GDP with more than 650 million
international tourist arrivals registered last year, making it the largest
single industry on the planet. In some parts of Latin America and the Caribbean
(Bahamas, Costa Rica, Mexico, Cuba) tourism is the largest employer and one of
the largest sources of foreign capital. More than most industries, tourism
dollars trickle down to small-scale business and help develop isolated regions.
Latin America and the Caribbean together hold a 10 percent market share in terms
of total international arrivals in the world.

Balance Sheet Data
- ------------------

<TABLE>
<CAPTION>
                                    At April 30, 2003     At April 30, 2002    At April 30, 2001
                                   -------------------   -------------------  -------------------

<S>                                     <C>                    <C>                 <C>
Total Assets                            130,157                236,254              269,194
Shareholders' Equity (deficit)          (26,123)                99,441             (682,956)
</TABLE>

Liquidity and Capital Resources
- -------------------------------

As at April 30, 2003, available unrestricted cash on hand plus net accounts
receivable due in less than 30 days amounted to $35,617 versus $84,085 for April
30, 2002, a decrease of 58%. Current assets less player deposits as at April 30,
2003 were $66,544 and current liabilities less players deposits were $104,643.
Total liabilities as at April 30, 2003 were $156,280 versus $136,813 as at April
30, 2002. Approximately 75 % of the current liabilities as at April 30, 2003
consists of wages payable to Chairman , President, and Chief Executive Officer
Terry G. Bowering ($53,387), customers deposits ($51,637), and stock
subscription payable ($12,500). Total stockholders Equity was ($ 26,123) as at
April 30, 2003 versus $99,441 as at April 30, 2002.

The company received its trading symbol (NTFSF) from the NASD on February 21st,
2003. The company now has a ready market for its issued shares which greatly
enhance opportunities for additional equity financing in fiscal period 2004.
Proceeds from a future equity offering in the second or third quarter of fiscal

- --------------------------------------------------------------------------------
Annual Report - 2003                                                  Page 27
<PAGE>



                             NET FORCE SYTEMS, INC.
- --------------------------------------------------------------------------------

period 2004 will be used to generate working capital to increase liquidity and
to engage in a merger acquisition transaction with a viable private or public
company with an established cash flow stream.

Material Commitments for Capital Expenditures
- ---------------------------------------------

There were no material commitments for capital expenditures as of the end of the
latest fiscal period ended April 30, 2003. The existing administrative office
and computer hardware includes personal computers, printers, fax machines, and
backup power supply units, which maintain operation of the electronic office
equipment during short power outages. This office equipment is adequate to
conduct current business operations.

From this office, the company conducts web-site design, marketing, customer
service support services for the company's websites. The company also manages
corporate communications and investor relations from this office. The company
maintains access to the Internet, which requires personal computers,
communications hardware and software, and backup power supply units. All of the
above commitments were settled in full payment in cash from the proceeds of
initial share issuances and from the proceeds from the initial promissory note
issued on July 15, 1999.

During the fiscal period ended April 30, 2003, no further payments were made to
World Gaming under the software license agreement for the initial software setup
and configuration. As stated, the major capital expenditure for software was a
one-time setup and configuration fee of US$100,000 payable to Starnet Systems
International (formerly Softec Systems). An initial payment of US$10,000.00 was
paid upon execution of the agreement on July 15, 1999 leaving a balance of
US$90,000.00 payable upon completion of the configuration/design of the software
and commencement of live operations. In September of 2000, the balance of this
one-time initial setup fee was subsequently negotiated to zero as a result of a
compensation agreement with Starnet Systems International. During the fiscal
period 2003, only monthly royalty fees (as a percentage of monthly total
revenues), were paid to World Gaming.

We anticipate that we will have material capital expenditures in the next fiscal
period. Now that we have obtained a trading symbol from the NASD (NTFSF), we
intend to engage in an acquisition of a viable private or public company during
the second or third quarter of fiscal period 2004. Alternatively, our new
subsidiary, Atlantica Resorts, Ltd., will be seeking to engage in an acquisition
of an income- producing resort or investment property (see: `Operations Over The
Next Twelve Months'). These prospective transactions will be funded primarily
through equity financings.

Material Commitments for Resources
- ----------------------------------

No material commitments of resources were made during the fiscal period ended
April 30, 2003.

Any material commitments of resources over the next year will be funded from an
additional financing which may consist of a combination of equity financing and
issuing a promissory note with a possible convertible equity component attached.

Impact of Inflation
- -------------------

The Company believes that inflation will not materially affect its business.


ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
- --------------------------------------------------

Directors and Senior Management
- -------------------------------

The daily affairs of Net Force Systems Inc. are under the direction of its
senior management: Mr. Terry Bowering, President.




- --------------------------------------------------------------------------------
Annual Report - 2003                                                  Page 28
<PAGE>



                             NET FORCE SYTEMS, INC.
- --------------------------------------------------------------------------------

The directors, officers and senior management of Net Force Systems Inc. are as
follows:

Name               Age   Position      Residency        Term as Director

Terry Bowering     42    President     St. Johns        03/99 - present
                                       Antigua

Dwight Lewis       42    Director      St. Johns        12/99 - present
                                       Antigua

Derek Ferguson     31    Director      Vancouver, BC    10/01 - present
                                       Canada

Trevor Bowering    44    Director      Regina, Sk.      08/01 - present
                                       Canada

Terry G. Bowering
- -----------------
Chairman, President and Chief Executive Officer
Dove Cove, Dry Hill
P.O. Box W-645
St. John's, Antigua, West Indies

DOB: August 30, 1960 (Age 42)
Regina, Saskatchewan, Canada

Terry G. Bowering, B.Admin, M.B.A.
- ----------------------------------

Mr. Bowering brings over fifteen years of experience in business management. Mr.
Bowering has considerable experience in both large corporations and
entrepreneurial enterprises and is qualified in the areas of business
development, finance, information systems, marketing, and sales. From January
1998 until his resignation June 20, 1999, Mr. Bowering was Vice President,
Offshore Operations for Starnet Communications International Inc., a Delaware
corporation, which is a fully reporting issuer on the NASD OTC:BB. Described as
being the "Microsoft of Internet Gaming", Starnet Communications International,
Inc., now World Gaming, is one of the world's leading Internet Gaming Software
providers. Mr. Bowering was instrumental in establishing and developing offshore
operations and foreign government relations for World Gaming in Antigua and for
establishing worldwide offshore banking relationships in concert with the
corporate development of World Gaming's subsidiaries, Electronic Financial
Services Caribbean Inc. and its group of International companies. Mr. Bowering
has been interviewed and quoted in the International press including FOX TV,
COMPUTER WORLD MAGAZINE, SHIFT MAGAZINE, TIME MAGAZINE (Atlantic Edition), and
ESPN, specifically on the subject of offshore Internet Gaming. From 1996 to
1998, Mr. Bowering was an Investment Advisor, Vancouver office, with Levesque
Securities Inc., a major Canadian brokerage firm. From May 1992 to June 1996,
Mr. Bowering was a financial analyst with the Asset Management Group Dept. of
Crown Life Insurance in Regina, Saskatchewan, Canada.

Mr. Bowering holds a Bachelor of Administration in Finance from the University
of Regina, and a Master of Business Administration with a concentration in
Strategic Management from the University of Saskatchewan. Mr. Bowering resides
in Antigua, West Indies.

Mr. Bowering was appointed to the above positions on March 1, 1999 to serve
until his successor has been elected and qualifies.

Dwight Lewis
- ------------
Director
Cassada Gardens
P.O. Box W-386
St. John's, Antigua, West Indies

DOB: May 24, 1961 (Age 42)
St. Lucia, West Indies



- --------------------------------------------------------------------------------
Annual Report - 2003                                                  Page 29
<PAGE>



                             NET FORCE SYTEMS, INC.
- --------------------------------------------------------------------------------

Dwight Lewis, MA, BSc.
- ----------------------

Mr. Lewis is presently engaged as a Financial Consultant to Hanson International
Investment Services Ltd., an investment advisory organization. He also is
Managing Director of Mahaut Ltd., a corporation that provides offshore financial
services to its clients. Most recently Mr. Lewis was engaged as a Financial
Consultant and Interim Manager of RYO International Corporation and SAGA
Corporation, which were eventually merged to form International Data Processing.
This corporation owns and operates a number of Internet Casinos based and
licensed in Antigua. On behalf of the corporation's overseas principals, Mr.
Lewis was responsible for establishing these operations from conception to live
operation, having dealt with all aspects of the company's operations and
providing ongoing management and supervisory services.

From 1992 to 1997, Mr. Lewis was employed with the Bank of Antigua Ltd. as a
Senior Manager dealing with management of the investment portfolio and general
supervision of all bank operations. From 1988 to 1992, Mr. Lewis was employed
with the Eastern Caribbean Central Bank, located in St. Kitts, as a Senior Bank
Examiner. This entailed general supervision of commercial banking activities in
all member banks of the Eastern Caribbean Central Bank. From 1986 to 1988, Mr.
Lewis worked as a Budget Analyst with the Ministry of Finance, Government of St.
Lucia, and with Barclays Bank, St. Lucia, from 1980 to 1983.

Mr. Lewis graduated from the University of West Indies, Cave Hill Campus,
Barbados, with a Bachelor of Science Degree in Economics and Management. Mr.
Lewis also attended the University of Sheffield, Management School, England,
where he obtained an MA in Banking and International Finance. Mr. Lewis resides
in Antigua, West Indies.

Mr. Lewis was appointed to the position of Director on December 20, 1999 to
serve until his successor has been elected and qualifies.

Derek C. Ferguson
- -----------------
Director
512-1238 Seymor St.
Vancouver, B.C., V6B 6J3 Canada

DOB: August 12, 1972 (Age 31)
Vancouver, Canada

Derek C. Ferguson, B.Comm
- -------------------------

Mr. Ferguson advises on and oversees technical and systems-related issues and
initiatives for Netforce Systems Inc. Mr. Ferguson is presently a Director and
Chief Operations Officer for eTunnels Inc., a Delaware corporation that delivers
mass-market and corporate virtual private networking solutions over the
Internet.

From April 1998 to October of 1999, Mr. Ferguson acquired in-depth experience in
the online gaming industry in his role as Senior Systems Administrator for
Starnet Communications International Inc., an International Internet Technology
company. Starnet is recognized as the world's leading Internet Gaming Software
provider. In addition to providing technical design and maintenance leadership
for the Systems Administration department, Mr. Ferguson redesigned its systems
infrastructure to dramatically improve the reliability and scalability of
Starnet's Internet services. Mr. Ferguson was also Network Manager for I.D.
Internet Direct Ltd., a division of Look Communications Inc., a publicly traded
Canadian company operating in the fields of broadcast distribution services and
Internet solutions. At Internet Direct, Mr. Ferguson directed technical design
and support operations for their national consumer dial and corporate broadband
services, helping to grow the service to 35,000 subscribers. Mr. Ferguson
received his Bachelor of Commerce degree with a concentration in Management and
Information Systems (MIS) from Dalhousie University, Halifax, Canada. Mr.
Ferguson resides in Vancouver, Canada.

Mr. Ferguson was appointed to the position of Director on September 10, 2001 to
serve until his successor has been elected and qualifies.




- --------------------------------------------------------------------------------
Annual Report - 2003                                                  Page 30
<PAGE>



                             NET FORCE SYTEMS, INC.
- --------------------------------------------------------------------------------

Trevor L. Bowering
- ------------------
Director
370 Cedar Meadow Drive
Regina, Saskatchewan, Canada, S4X 3J5

DOB: March 14, 1959 (Age 44)
Regina, Canada

Trevor L. Bowering - Technical Consultant
- -----------------------------------------

Mr. Bowering has been employed in the telecommunications field with SaskTel for
over 22 years. With assets of over $1.2 billion, SaskTel has been in operation
for 90 years and provides a full range of hi-tech communication solutions for
more than 454,000 business and residential customers worldwide. SaskTel is a
crown corporation, wholly-owned by the province of Saskatchewan, Canada, and a
world leader in providing the latest technological and software solutions
telecommunications expertise as well as Internet and Interactive services. Mr.
Bowering currently manages SaskTel's Local and Long-distance switching network
including DMS100's, DMS200, STP, DC Power Plants, Operator Services,
Interexchange Carriers (Telus, ATT, Bell, Nexia), 911, Mobility (cellular),
CCS7, and Network Management. He personally oversees a staff of staff of 39
Trunking and Switching Technicians responsible for installing, maintaining and
trouble shooting on a 24/7 basis. SaskTel's entire high-speed Internet system
interfaces to its customers via this Switching equipment. Mr. Bowering and his
staff have been on assignment with SaskTel International in England, Italy,
Spain, Chile, Belgium, and France. Mr. Bowering currently resides in Regina,
Saskatchewan, Canada.

Mr. Bowering was appointed to the position of Director on August 15, 2001 to
serve until his successor has been elected and qualifies.

Compensation
- ------------

Our directors receive reimbursement of all their reasonable expenses incurred in
connection with attending meetings of the board of directors. As of the date of
this annual report no employee or executive stock option plans have been
designed or approved by us.

For the fiscal period ended April 30, 2003, Terry G. Bowering, Chairman and
President, accrued $50,000 in wages payable during the period for a total
accrued wages payable of $53,387 as at April 30, 2003. Dwight Lewis, Director,
received a total of $5,000 in Director's fees for the period. No other persons
who served either as directors of Net Force Systems Inc. or members of its
administrative, supervisory or management bodies during fiscal 2003 received
salary remuneration from Net Force System Inc. These individuals received
reimbursement for travel and business expenses only except for Mr. Trevor
Bowering who received 200,000 shares for services to be rendered as a director.

Board Practices
- ---------------

All directors hold office until their respective successors are duly elected and
qualified or their positions are earlier vacated by resignation or otherwise.

Executive officers of Net Force Systems Inc. serve in their positions until
their respective successors have been duly elected or qualified or their
positions are earlier vacated by resignation or otherwise.

There are no service contracts between our company and any of our directors
providing for benefits upon termination of their employment.

Committees
- ----------

Our audit committee is comprised of Mr. Terry Bowering, Mr. Trevor Bowering and
Mr. Dwight Lewis.

Employees
- ---------

As of April 30, 2003 we employed on a full-time basis approximately 2 persons
located in the Caribbean.

- --------------------------------------------------------------------------------
Annual Report - 2003                                                  Page 31
<PAGE>



                             NET FORCE SYTEMS, INC.
- --------------------------------------------------------------------------------

As of April 30, 2002 we employed on a full-time basis approximately 2 person
located in Caribbean.

As of April 30, 2001, we employed on a full-time basis approximately 2 persons
located in the Caribbean.

As of April 30, 2000, we employed on a full-time basis approximately 5 persons
located in the Caribbean.

We are not party to any collective bargaining agreements.

Share Ownership
- ---------------

The following tables set forth certain information regarding beneficial
ownership of our common stock as of April 30, 2003 by each of our directors and
executive officers.

<TABLE>
<CAPTION>
     Name and Address                                  Amount and Nature            Percent
     of Beneficial Owner                               of Beneficial Owner (1)      of Class
- ----------------------------------------------------------------------------------------------
<S>                                                    <C>                           <C>
     Terry G. Bowering                                 6,544,830                     40.0%
     Dove Cove, Dry Hill.                              beneficial owner (2)
     P.O. Box W-645
     St. John's, Antigua, West Indies
     Chairman,/President/Chief Executive Officer

     Terry G. Bowering                                   500,000                      3.1%
     C/o ABI Trust , Ltd.                              beneficial owner (3)
     High Street & Corn Alley, P.O. Box 1679
     St. John's, Antigua, West Indies

     Dwight Lewis, Director                               50,000                     0.30%
     Cassada Gardens
     P.O. Box W 386 St. Johns, Antigua West Indies

     Derek C. Ferguson, Director                          50,000                     0.30%
     512-1238 Seymor St.
     Vancouver, British Columbia, Canada, V6B 6J3

     Trevor Bowering, Director                           200,000                      1.2%
     370 Cedar Meadow Drive
     Regina, Sask. Canada S4X 3J5

<FN>
(1)  No member of Management has the right to acquire within sixty days through
     options, warrants, rights, conversion, privilege or similar obligations any
     security of the Company.
(2)  Geneva Overseas Holdings Ltd., of which Terry G. Bowering is beneficial
     owner, enjoys legal ownership of said securities.
(3)  JPKT Metro Investment Corporation, of which Terry G. Bowering is a
     beneficiary, enjoys legal ownership of said securities.
</FN>
</TABLE>

Note: The table does not reflect the stock options that may be granted to
Employees, Officers, Directors or Consultants nor does it reflect the warrants
that may be offered.


ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
- ---------------------------------------------------------

The following table sets forth certain information regarding beneficial
ownership of our common stock as of April 30, 2003 by (i) each person who is
known to us to own beneficially more than 5% of our outstanding common stock,
(ii) each of our directors, (iii) executive officers and (iv) all current
directors and executive officers as a group.


- --------------------------------------------------------------------------------
Annual Report - 2003                                                  Page 32
<PAGE>



                             NET FORCE SYTEMS, INC.
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
     Name and Address                                  Amount and Nature            Percent
     of Beneficial Owner                               of Beneficial Owner (1)      of Class
- --------------------------------------------------------------------------------------------
<S>                                                    <C>                           <C>
     Terry G. Bowering                                 6,544,830                     40.0%
     Dove Cove, Dry Hill.                              beneficial owner (2)
     P.O. Box W-645
     St. John's, Antigua, West Indies
     Chairman,/President/Chief Executive Officer

     Terry G. Bowering                                   500,000                      3.1%
     C/o ABI Trust Ltd.                                beneficial owner (3)
     High Street & Corn Alley, P.O. Box 1679
     St. John's, Antigua, West Indies

     IFG Investments Services Inc.                     6,027,870                     36.8%
     Suite #4 - Temple Building                        beneficial owner (4)
     Main & Princess William St.
     Charelstown, Nevis, West Indies

     Dwight Lewis, Director                               50,000                     0.30%
     Cassada Gardens
     P.O. Box W 386 St. Johns, Antigua West Indies

     Derek C. Ferguson, Director                          50,000                     0.30%
     512-1238 Seymor St.
     Vancouver, British Columbia, Canada, V6B 6J3

     Trevor Bowering, Director                           200,000                      1.2%
     370 Cedar Meadow Drive
     Regina, Sask.
     Canada S4X 3J5

     All Directors & Executive Officers
     And control persons as a Group (5 persons)       13,272,700                     81.7%
                                                      ----------                     -----

     Total shares outstanding                         17,066,033                      100%
                                                      ==========                      ====

<FN>
(1)  No member of Management has the right to acquire within sixty days through
     options, warrants, rights, conversion, privilege or similar obligations any
     security of the Company.
(2)  Geneva Overseas Holdings Ltd., of which Terry G. Bowering is beneficial
     owner, enjoys legal ownership of said securities.
(3)  JPKT Metro Investment Corporation, of which Terry G. Bowering is a
     beneficiary, enjoys legal ownership of said securities.
(4)  IFG Investments Services Inc., of which Daniel MacMullin is beneficial
     owner, enjoys legal ownership of said securities.
</FN>
</TABLE>

Note: The table does not reflect the stock options that may be granted to
Employees, Officers, Directors or Consultants nor does it reflect the warrants
that may be offered.

Related Party Transactions
- --------------------------

A related party transaction took place between Geneva Overseas Holdings Ltd. and
Net-Force Systems Inc. Geneva Overseas Holdings Ltd. is controlled by the
President of Net-Force Systems Inc., Mr. Terry G. Bowering. Geneva Overseas
Holdings Ltd. provided a total of $214,483 in shareholder loans to Net-Force
Systems Inc. On September 15, 2001, Geneva Overseas Holdings Ltd. entered into
an agreement with Net-Force Systems Inc. to convert the principal and accrued


- --------------------------------------------------------------------------------
Annual Report - 2003                                                  Page 33
<PAGE>



                             NET FORCE SYTEMS, INC.
- --------------------------------------------------------------------------------

interest at that date on the loans to equity at $0.10 per share. The total
shares issued to Geneva Overseas Holdings Ltd. was 2,144,830.

In June 2003, the Company's Board of Directors entered into an agreement to sell
its wholly-owned subsidiary, Net Force Entertainment, Inc. (Entertainment) to
Geneva Overseas Holdings Ltd., a company owned by the Company's President and
CEO. The consideration for the sale per the sales agreement was $100 plus the
assumption of all outstanding debt. The Company no longer has any control over
Entertainment. This event signifies Net-Force Systems Inc.'s official exit from
the Internet Gambling Industry. See Note 11-Subsequent Events, in Notes to the
Consolidated Financial Statements.

We are not aware of any other transactions or proposed transactions in respect
of which we were or are to be a party, in which any director, executive officer,
nominee for election as a director, 5% security holder, member of the immediate
family of any of the previously named persons had a direct or indirect interest
in the transaction.


ITEM 8. FINANCIAL INFORMATION
- -----------------------------

Financial Statements
- --------------------

See "Financial Statements" for our audited Consolidated Financial Statements and
Financial Statement Schedule filed as part of this report.

Legal Proceedings
- -----------------

We are not involved in any material legal proceedings.

Dividend Policy
- ---------------

We have not declared dividends from our inception and do not foresee declaring
any dividends in the foreseeable future. The payment of any future dividends
will be paid by us based on conditions then existing, including our earnings,
financial condition and capital requirements as well as other conditions we deem
relevant.


ITEM 9. THE OFFER AND LISTING
- -----------------------------

Our ordinary shares have never been quoted on any exchange or quotation service.
On February 21st, 2003, we received a stock trading symbol (OTC:BB NTFSF) from
the NASD. No shares have been traded to date.


ITEM 10. ADDITIONAL INFORMATION
- -------------------------------

Memorandum and Articles of Association

Objects and Purpose
- -------------------

1. The Company is registered at the companies registry in Antigua, and has been
assigned company number 011949, having its registered office situated at No. 6
Temple Street, P.O. Box 2372, Septimus A Rhudd Law Office, St. John's, Antigua
and Barbuda. The objects for which the Company is established allow at Article
IV:

a.   To conduct any and all business activities permitted by the Laws of
Antigua/Barbuda as an International Business Corporation;

b.   To carry on the business of an investment and holding company and for that
purpose to acquire and hold either in the name of the Corporation or in that of
any nominee, shares, stocks, debentures, debenture stock, script bonds, notes,
obligations, investments and securities and warrants or options in respect of
any shares, stocks, debentures, debenture stock, script bonds, notes,
obligations, investments or securities, of all kinds issued in any country in
any part of the world.


- --------------------------------------------------------------------------------
Annual Report - 2003                                                  Page 34
<PAGE>



                             NET FORCE SYTEMS, INC.
- --------------------------------------------------------------------------------

c.   To acquire and deal with any property, real or personal, to erect
buildings, and generally to do all acts and things which, in the opinion of the
Corporation or the Directors, may be conveniently or profitably, or usefully,
acquired and dealt with, carried on, erected or done by the Corporation in
connection with said property.

d.   The Corporation shall not engage in International Banking, Trust,
Insurance, Betting and Book making or any activity which requires a License
under the International Business Corporations Act.

e.   To generally have and exercise all powers, rights and privileges necessary
and incident to carrying out properly the objects herein mentioned.

Directors and Powers
- --------------------

2.   Bylaw 8.3 of the Corporation states a director may hold any other office or
place of profit under the Corporation and he or any firm of which he is a member
may act in a professional capacity for the Corporation in conjunction with his
office of director of the Corporation for such period and in such terms as to
remuneration and otherwise as the Board may determine. No director or intending
director shall be disqualified by his office from contracting with the
Corporation, either with regard thereto, as a vendor, purchaser or otherwise,
nor shall any such contract, or any contract or arrangement entered into by or
on behalf of the Corporation in which any director so contracting or being so
interested be liable to account to the Corporation for any profit realized by
any such contract or arrangement by reason of such director holding such office,
or of the fiduciary relationship thereby established so long as the director
notifies the Corporation in accordance with the requirements of the Act. To the
extent permitted by the Act, any director may vote as a director or shareholder
in respect of any such contract or arrangement; provided that such director must
disclose his interest in the contract or arrangement, the contract or
arrangement must be entered into by the Corporation in an Annual or Special
Shareholders' Meeting, and before the contract or arrangement is so entered
into, the directors must disclose their interests to the meeting.

Directors of the company do not have to retire under an age limit requirement
and are not required to own shares of the company in order to serve as
directors.

Bylaw 8.2 states each of the Directors shall be paid out of the funds of the
Corporation such remuneration for his services as a director as the Corporation
is an Annual Shareholders' Meeting may from time to time determine. The
directors may also be paid all traveling, hotel and other expenses properly
incurred by them in attending and returning from meetings of the directors or
any committee of the directors or meetings of the Corporation or in connection
with the business of the Corporation.

Bylaw 8.9 states the business of the Corporation shall be managed by the Board,
who may exercise all such powers of the Corporation as are not by the Act or by
these By-Laws required to be exercised by the Corporation in an Annual
Shareholders' Meeting, subject nevertheless to any regulation of these By-Laws,
to the provisions of the Act as may be prescribed by special resolution of the
Corporation, but no regulation so made by the Corporation shall invalidate any
prior act of the Board which would have been valid if such regulation had not
been made. The general powers given by this by-law shall not be limited or
restricted by any special authority or power given to the Board by any other
By-Law.

Rights and Privileges of Common Shares
- --------------------------------------

3.   Bylaw 5 states the Board may from time to time declare, and the Corporation
may pay, dividends on its outstanding shares in the manner and upon the terms
and conditions provided by law. Bylaw 7.8 states every shareholder shall have
one vote for each share of which he is the holder. All elections for directors
shall be decided by majority vote; all other questions shall be decided by
majority vote except as otherwise required by the Act. Bylaw 12 states if the
Corporation shall be wound up (whether the liquidation be voluntary, under the
supervision of or by the Court) the Liquidator may, with the required authority,
divide among the shareholders in specie or kind the whole or any part of the
assets of the Corporation, and whether or not the assets shall consist of
property of one kind or properties of different kinds, and may for such purpose
set such value as he deems fair upon one or more or classes of property, and may
determine how such different classes of shareholders. The Liquidator may, with
the like authority, vest any part of the assets in trustees upon such trusts for
the benefit of shareholders as the Liquidator with the like authority shall
think fit, and the liquidation of the Corporation may be closed and the
Corporation dissolved. Article III states no share shall have a pre-emptive


- --------------------------------------------------------------------------------
Annual Report - 2003                                                  Page 35
<PAGE>



                             NET FORCE SYTEMS, INC.
- --------------------------------------------------------------------------------

right. Article VII states the liability of a shareholder is limited to the
amount, if any, unpaid on the shares held or subscribed to by said shareholder.
The Articles and Bylaws are silent regarding redemption provisions, sinking fund
provisions or any provision regarding discrimination against any existing or
prospective holder of such securities as a result of such shareholder owning a
substantial number of shares.

4.   A special resolution (requiring a 2/3 majority or signature of all
shareholders entitled to vote) is required to amend the Company's articles in
such circumstances as to change any maximum number of shares that the Company is
authorized to issue, to create new classes of shares, to change the designation
of all or any of its shares and add, change or remove any rights privileges,
restrictions and conditions including rights to accrued dividends, in respect of
all or any of its shares, whether issued or unissued pursuant to section 161 and
163 of the International Business Corporations Act of Antigua and Barbuda.

5.   The conditions governing the manner in which annual general meetings and
special general meetings of shareholders are convoked are contained in Bylaw 7.2
to 7.12:

     7.2  Annual Shareholders' Meeting

     An Annual Shareholders' Meeting of the Corporation shall be held every year
     after the incorporation of the Corporation at such time and place within
     Antigua and Barbuda as shall from time to time be prescribed by the Board.

     7.3  Special Shareholders' Meeting

     The Board may, whenever it thinks fit, convene a Special Shareholders'
     Meeting. The Board shall also on the requisition of the holders of not less
     than one-twentieth (1/20) of the issued share capital of the Corporation
     proceed to convene a special Shareholders' Meeting of the Corporation.

     7.4  Proceedings

     All business shall be deemed special that is transacted at a Special
     Shareholders' Meeting, and also that is transacted at any Annual
     Shareholders' Meeting, with the exception of the consideration of the
     accounts and auditor's report, if any, the election of directors and the
     reappointment of any incumbent auditor.

     7.5  Quorum

     No business shall be transacted at any shareholders' meeting unless a
     quorum of shareholders is present at the time when the meeting proceeds to
     business. Save as is herein otherwise provided, shareholders present in
     person or by proxy representing a majority of the Corporation's shares
     shall constitute a quorum.

     7.6  Chairman

     All meetings shall be chaired by a Director appointed by the Board to act
     as Chairman.

     7.7  Minutes

     Minutes of the proceedings of every Annual Shareholders' Meeting shall be
     kept, and shall be signed by the Chairman of the same meeting, or by the
     Chairman of the next succeeding meeting, and the same, when so signed,
     shall be conclusive evidence of all such proceedings and of the proper
     election of the Chairman.

     7.8  Votes of Shareholders

     Subject to any rights or restrictions for the time being attached to any
     class or classes of shares, every shareholder shall have one vote for each
     share of which he is the holder. All elections for directors shall be
     decided by majority vote; all other questions shall be decided by majority
     vote except as otherwise required by the Act.

     7.9  Informal Action by Shareholder


- --------------------------------------------------------------------------------
Annual Report - 2003                                                  Page 36
<PAGE>



                             NET FORCE SYTEMS, INC.
- --------------------------------------------------------------------------------

     Unless otherwise provided by law, any action required to be taken at a
     meeting of the shareholders, or any other action which may be taken at a
     meeting of the shareholders, may be taken without a meeting if a consent in
     writing, setting forth the action so taken, shall be signed by all of the
     shareholders entitled to vote with respect to the subject matter thereof.

     7.10  Proxies

     Votes may be given either personally or by proxy. The instrument appointing
     a proxy shall be in writing under the hand of the appointer or his attorney
     duly authorized in writing, or if the appointer is a corporation, either
     under seal or under the hand of an officer or attorney duly authorized. A
     proxy need not be a shareholder of the Corporation. The instrument
     appointing a proxy and the power of attorney or other authority, if any,
     under which it is signed or a certified copy of that power of attorney
     shall be deposited at the office or at such other place within Antigua as
     is specified for that purpose in the notice convening the meeting.

     7.11  Notice of Meeting

     Written or printed notice stating the place, day and hour of the meeting
     and, in case of a special meeting, the purpose or purposes for which the
     meeting is called, shall be delivered not less that Twenty-One (21) days
     before the date of the meeting, either personally by mail or facsimile, to
     each shareholder on record entitled to vote at such meeting. If mailed,
     such notice shall be deemed to be delivered when deposited in the mail,
     addressed to the shareholder at his address as it appears on the stock
     transfer books of the Corporation, with postage thereon prepaid.

     7.12  Waiver of Notice

     Unless otherwise provided by law, whenever any notice is required to be
     given to any shareholder, a waiver thereof in writing, signed by the person
     or persons entitled to such notice, whether before or after the time stated
     therein, shall be deemed equivalent to the giving of such notice.

6.   Article X states no securities of the Corporation will be distributed to
the public in Antigua and Barbuda in contravention of Section 365 of the
International Business Corporations Act, 1982.

7.   There is not Article or Bylaw that directly deals with would delay, defer
or prevent a change in control of the Corporation and that would operate only
with respect to a merger, acquisition or corporate restructuring involving the
Corporation.

8.   There is no Bylaw provisions governing the ownership threshold above which
shareholder ownership must be disclosed.

9.   Article IV paragraph 4 describes the conditions imposed by the Articles of
Incorporation governing changes in the capital. Paragraph specifically states:

     4.   The Corporation shall have the power to increase or reduce said
     capital, and to issue any part of its capital, original or increased, with
     or without any preference, priority, or special privilege, or subject to
     any postponement of rights, or to any conditions or restrictions, and so
     that, unless the conditions of issue shall otherwise expressly declare,
     every issue of shares, whether declared to be preference or otherwise shall
     be subject to the power herein contained.

Material Contracts
- ------------------

Please refer to our exhibits in our registration statement dated October 24,
2002 and all prior amendments for copies of our material agreements:

     10.1   Starnet Systems Inc. (formerly Softec Systems Caribbean Inc.)
            Amendment to Software License Agreement
     10.2   Government of Antigua and Barbuda Gaming License


- --------------------------------------------------------------------------------
Annual Report - 2003                                                  Page 37
<PAGE>



                             NET FORCE SYTEMS, INC.
- --------------------------------------------------------------------------------

     10.3   Software and Marketing License Agreement
     10.4   Antigua Online Gaming Wagering and Gaming Reseller Agreement
     10.5   IFG Investments Services Inc. Debt to Equity Conversion Agreement
     10.6   American International Bank (Lease Agreement)
     10.7   Geneva Overseas Holdings Ltd. Debt to Equity Conversion Agreement

Exchange Controls
- -----------------

Not applicable.

Taxation
- --------

United States security holders of the registrant company are not subject to
taxes or withholding provisions. Sections 271- 274 of the International Business
Corporations Act, 1982, Antigua and Barbuda, Division G: Special Taxation
Provisions detail the relevant tax provisions under the Act.

Section 271, "Exempt corporations" states the following:

"For the purposes of this Division, an exempt corporation shall mean any
corporation formed or continued under this Act."

Section 272, "Exemption from tax" states the following:

(1)  No income tax, capital gains tax, or other direct tax or impost may be
     levied in Antigua and Barbuda upon the profits or gains of an exempt
     corporation, in respect of the international trade and business it carries
     on from within Antigua and Barbuda.

(2)  No income tax, capital gains tax, or other direct tax or impost may be
     levied in Antigua and Barbuda in respect of any securities or assets of an
     exempt corporation that are beneficially owned by an exempt corporation or
     by a person who is not a resident.

(3)  No estate, inheritance, succession or similar tax or impost may be levied
     in Antigua and Barbuda in respect of any securities or assets of an exempt
     corporation that are beneficially owned by an exempt corporation or by a
     person who is not a resident.

(4)  No tax, duty or other impost may be levied upon the increment in value of
     the property, or other assets in Antigua and Barbuda or elsewhere of an
     exempt corporation other than upon such of them as are distributed to
     residents.

Section 273, "No assets transfer tax".

(1)  No tax, duty or other impost may be levied upon an exempt corporation, its
     security holders or transferees in respect of the transfer of all or any
     part of it's securities or other assets to another exempt corporation or to
     a person who is not a resident.

(2)  When an exempt corporation or a person who is not a resident transfers
     securities or assets of an exempt corporation that are held by that exempt
     corporation, or person to another exempt corporation, or to another person
     who is not a resident, the transfer is exempt from the payment of any tax,
     duty, or other impost thereon.

(3)  No income tax or capital gains tax, and no other direct tax or impost, may
     be levied or collected in Antigua and Barbuda, in respect of any dividends
     interests or other returns from any securities, deposits or borrowings of
     an exempt corporations or any assets managed by the exempt corporation if
     the dividends, interest or other returns are in respect of securities,
     deposits, borrowings or assets beneficially owned by another exempt
     corporation, or a person who is not a resident; but the onus of
     establishing ownership, lies upon the exempt corporation holding or
     managing the deposits, borrowings or assets.


- --------------------------------------------------------------------------------
Annual Report - 2003                                                  Page 38
<PAGE>



                             NET FORCE SYTEMS, INC.
- --------------------------------------------------------------------------------

Section 274, "Withholding tax and report"

(1)  Notwithstanding, any provision of the Income Tax Ordinance, but subject to
     subsection (2), no exempt corporation need withhold any portion of any
     dividend, interest or other returns, payable of any person in respect of
     any borrowings of the exempt corporation from that person or in respect of
     securities of the exempt corporation held by that person.

(2)  All dividends interest or other returns attributable to the securities of,
     or the management of, assets by an exempt corporation that are payable to a
     resident who is known to be a resident, by the exempt corporation or who,
     with the exercise of reasonable care by the exempt corporation, could be
     known by him to be a resident, must be reported to the Commissioner of
     Inland Revenue by the exempt corporation.

Section 276 of the Act, "Duration of tax exemption" states the following:

"Any tax exemption provided under this Act, shall continue in effect for a
period of fifty years from the date of incorporation of the exempt corporation."

There is no reciprocal tax treaty in existence between the United States and
Antigua and Barbuda regarding withholding taxes.

Documents On Display
- --------------------

Documents which are referred to in this annual return and that are not
confidential to our company, all of which are or will be in effect may be
obtained and/or reviewed at our offices by contacting Mr. Terry Bowering at
netforce@candw.ag. We may require a prospective investor's prior execution of
confidentiality and nondisclosure agreements before accessing certain of our
documents.


ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
- ------------------------------------------------------------------

(a)  Quantitative and Qualitative information about market risk.

We are not subject to market risk as referred to in this item because we use the
United States of America dollar in all transactions we conduct and operate in
jurisdictions that utilize the American dollar as the unit of measure. Other
than being a foreign issuer our company would satisfy the definition of a Small
Business Issuer under the Securities Exchange Act of 1934.


ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
- ---------------------------------------------------------------

Not applicable.


PART II
- -------

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
- --------------------------------------------------------

Not applicable.


ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF
- ----------------------------------------------------------------------------
PROCEEDS
- --------

Not applicable.




- --------------------------------------------------------------------------------
Annual Report - 2003                                                  Page 39
<PAGE>



                             NET FORCE SYTEMS, INC.
- --------------------------------------------------------------------------------

PART III
- --------

ITEM 17. FINANCIAL STATEMENTS
- -----------------------------

Not applicable.


ITEM 18. FINANCIAL STATEMENTS
- -----------------------------

FINANCIAL STATEMENTS AND SCHEDULE

The following Consolidated Financial Statements and Financial Statement Schedule
are included at the end of this report:

FINANCIAL STATEMENTS (Schedule "A" and "B")
- -------------------------------------------

     o    Report of Independent Auditors
     o    Consolidated Balance Sheets as of April 30, 2003, 2002, 2001 and 2000
     o    Consolidated Statements of Operations for the years ended April 30,
          2003, April 30, 2002, April 30, 2001 and April 30, 2000
     o    Consolidated Statements of Changes in Shareholders' Equity (Deficit)
          for the years ended April 30, 2003, April 30, 2002, April 30, 2001 and
          April 30, 2000.
     o    Consolidated Statements of Cash Flows for the years ended April 30,
          2003, April 30, 2002, April 30, 2001 and April 30, 2000.
     o    Notes to Consolidated Financial Statements


ITEM 19. EXHIBITS
- -----------------

Exhibit 99.1 - Certification of Chief Executive Officer and Chief Financial
Officer


SIGNATURES
- ----------

     The registrant hereby certifies that it meets all of the requirements for
filing on Form 20-F and that it has duly caused and authorized the undersigned
to sign this annual report on its behalf.


                                         Net Force Systems Inc.
                                         ----------------------



                                         /s/ Terry Bowering
                                         ------------------
                                         Terry Bowering - President and Director
                                         Authorized U.S. Representative

Date: August 15, 2003














- --------------------------------------------------------------------------------
Annual Report - 2003                                                  Page 40
<PAGE>



                             NET FORCE SYTEMS, INC.
- --------------------------------------------------------------------------------

CERTIFICATIONS*
- ---------------

I, Terry Bowering, certify that;

1.   I have reviewed this annual report on Form 20-F of Net Force Systems, Inc.

2.   Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3.   Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4.   The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this annual report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this annual
report (the "Evaluation Date"); and

c) presented in this annual report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5.   The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit committee
of registrant's board of directors (or persons performing the equivalent
functions):

a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and

6.   The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other facts that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

Date: August 8, 2003


/s/ Terry Bowering
- ------------------
Terry Bowering, Chief Executive Officer, Chief Financial Officer, President &
Director

*Provide a separate certification for each principal executive officer and
principal financial officer of the registrant. See Rules 13a-14 and 15d-14. The
required certification must be in the exact form set forth above.









- --------------------------------------------------------------------------------
Annual Report - 2003                                                  Page 41
<PAGE>



                             NET FORCE SYTEMS, INC.
- --------------------------------------------------------------------------------

EXHIBIT 99.1
- ------------


CERTIFICATION OF CHIEF EXECUTIVE OFFICER
AND CHIEF FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


I, Terry Bowering, Chief Executive Officer and Chief Financial Officer, certify,
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that the Annual Report on Form 20-F of Net Force
Systems, Inc for the annual period ended April 30, 2003 fully complies with the
requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934
and that the information contained in the Annual Report on Form 20-F fairly
presents in all material respects the financial condition and results of
operations of Net Force Systems, Inc.

By:

/s/ Terry Bowering
- ------------------

Terry Bowering, Chief Financial Officer,
Chief Executive Officer,
President & Director
Date: August 8, 2003


































- --------------------------------------------------------------------------------
Annual Report - 2003                                                  Page 42
<PAGE>






SCHEDULE "A" - CONSOLIDATED FINANCIAL STATEMENTS
- ------------------------------------------------


















                      NET-FORCE SYSTEMS INC. AND SUBSIDIARY

                        CONSOLIDATED FINANCIAL STATEMENTS

                             April 30, 2003 and 2002

































- --------------------------------------------------------------------------------
Annual Report - 2003                                                  Page 43
<PAGE>










                                 C O N T E N T S


Independent Auditors' Report.............................................   3

Consolidated Balance Sheets..............................................   4

Consolidated Statements of Operations....................................   6

Consolidated Statements of Stockholders' Equity (Deficit)................   7

Consolidated Statements of Cash Flows....................................   8

Notes to the Consolidated Financial Statements...........................  10





































- --------------------------------------------------------------------------------
Annual Report - 2003                                                  Page 44
<PAGE>



                          INDEPENDENT AUDITORS' REPORT



To the Board of Directors
Net-Force Systems Inc. and Subsidiary
Antigua, West Indies

We have  audited  the  accompanying  consolidated  balance  sheets of  Net-Force
Systems  Inc.  and  Subsidiary  as of April  30,  2003 and 2002 and the  related
consolidated statements of operations,  stockholders' equity (deficit), and cash
flows for the years ended April 30, 2003,  2002,  and 2001.  These  consolidated
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is  to  express  an  opinion  on  these  consolidated  financial
statements based on our audits.

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

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all  material  respects,  the  consolidated  financial  position  of
Net-Force  Systems Inc. and  Subsidiary  as of April 30, 2003 and 2002,  and the
consolidated  results  of their  operations  and their  cash flows for the years
ended April 30, 2003,  2002, and 2001 in conformity with  accounting  principles
generally accepted in the United States of America.

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 4 to the
consolidated   financial   statements,   the  Company's  recurring  losses  from
operations as well as the  subsequent  disposal of all  operations and a working
capital deficit raise substantial doubt about its ability to continue as a going
concern.  Management's plans concerning these matters are also described in Note
4. The  consolidated  financial  statements do not include any adjustments  that
might result from the outcome of this uncertainty.



HJ & Associates, LLC
Salt Lake City, Utah
July 2, 2003






















                                       F-3

- --------------------------------------------------------------------------------
Annual Report - 2003                                                  Page 45
<PAGE>


<TABLE>
<CAPTION>
                      NET-FORCE SYSTEMS INC. AND SUBSIDIARY
                           Consolidated Balance Sheets


                                     ASSETS

                                                                          April 30,
                                                                   2003                2002
                                                             ----------------    ----------------

CURRENT ASSETS

<S>                                                          <C>                 <C>
   Cash                                                      $       31,714      $       68,462
   Accounts receivable, net                                           3,903              15,623
   Reserves and deposits with credit card
    processors (Note 7)                                              30,927              63,953
   Gaming license (Note 9)                                                -              18,333
                                                             ----------------    ----------------

     Total Current Assets                                            66,544             166,371
                                                             ----------------    ----------------

PROPERTY AND EQUIPMENT, NET (Note 2)                                  7,183              18,088
                                                             ----------------    ----------------

OTHER ASSETS

   Player deposits (Note 8)                                          51,637              47,002
   Deposits                                                           4,793               4,793
                                                             ----------------    ----------------

     Total Other Assets                                              56,430              51,795
                                                             ----------------    ----------------

     TOTAL ASSETS                                            $      130,157      $      236,254


























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

                                       F-4

- --------------------------------------------------------------------------------
Annual Report - 2003                                                  Page 46
<PAGE>


<CAPTION>
                      NET-FORCE SYSTEMS INC. AND SUBSIDIARY
                     Consolidated Balance Sheets (Continued)


                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

                                                                          April 30,
                                                                   2003                2002
                                                             ----------------    ----------------

CURRENT LIABILITIES

<S>                                                          <C>                 <C>
   Accounts payable                                          $       31,802      $       62,847
   Accrued expenses                                                  17,917              18,000
   Accrued expenses - related parties                                53,387               6,352
   Interest payable - related party                                       -                 112
   Interest payable                                                   1,537                   -
   Player deposits (Note 8)                                          51,637              47,002
   Current portion note payable - related party (Note 3)                  -               2,500
                                                             ----------------    ----------------

     Total Current Liabilities                                      156,280             136,813
                                                             ----------------    ----------------

     Total Liabilities                                              156,280             136,813
                                                             ----------------    ----------------

COMMITMENTS AND CONTINGENCIES (Note 6)

STOCKHOLDERS' EQUITY (DEFICIT)

   Preferred stock: 50,000,000 shares authorized of
    $0.001 par value, zero issued and outstanding                         -                   -
   Common stock: 100,000,000 shares authorized
    of $0.001 par value, 17,066,033 shares issued
    and outstanding                                                  17,066              17,066
   Additional paid-in capital                                     1,145,037           1,145,037
   Accumulated deficit                                           (1,188,226)         (1,062,662)
                                                             ----------------    ----------------

     Total Stockholders' Equity (Deficit)                           (26,123)             99,441
                                                             ----------------    ----------------

     TOTAL LIABILITIES AND STOCKHOLDERS'
     EQUITY (DEFICIT)                                        $      130,157      $      236,254
                                                             ================    ================
</TABLE>

















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

                                       F-5

- --------------------------------------------------------------------------------
Annual Report - 2003                                                  Page 47
<PAGE>


<TABLE>
<CAPTION>
                      NET-FORCE SYSTEMS INC. AND SUBSIDIARY
                      Consolidated Statements of Operations



                                                                               For the Years
                                                                              Ended April 30,
                                                      2003                2002                2001
                                                ----------------    ----------------    ----------------

<S>                                             <C>                 <C>                 <C>
REVENUE                                         $            -      $            -      $            -
                                                ----------------    ----------------    ----------------

EXPENSES                                                     -                   -                   -
                                                ----------------    ----------------    ----------------

LOSS FROM OPERATIONS                                         -                   -                   -
                                                ----------------    ----------------    ----------------

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

PROVISION FOR INCOME TAX                                     -                   -                   -
                                                ----------------    ----------------    ----------------

LOSS BEFORE DISCONTINUED OPERATIONS                          -                   -                   -
                                                ----------------    ----------------    ----------------

LOSS FROM DISCONTINUED OPERATIONS (NOTE 11)           (125,564)           (174,206)           (484,597)
                                                ----------------    ----------------    ----------------

NET LOSS                                        $     (125,564)     $     (174,206)     $     (484,597)

BASIC LOSS PER SHARE - DISCONTINUED
 OPERATIONS                                     $        (0.01)     $        (0.01)     $        (0.07)
                                                ================    ================    ================

WEIGHTED AVERAGE NUMBER OF
 SHARES OUTSTANDING                                 17,066,033          13,375,186           7,171,233
</TABLE>


























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

                                       F-6

- --------------------------------------------------------------------------------
Annual Report - 2003                                                  Page 48
<PAGE>


<TABLE>
<CAPTION>
                      NET-FORCE SYSTEMS INC. AND SUBSIDIARY
            Consolidated Statements of Stockholders' Equity (Deficit)

                                                        Common Stock                                Additional
                                               -------------------------------      Paid-In        Accumulated
                                                   Shares           Amount          Capital          Deficit
                                               --------------   --------------   --------------   --------------

<S>                                               <C>           <C>              <C>              <C>
Balance, April 30, 2000                            8,500,000    $      8,500     $     27,000     $   (403,859)

July 1, 2000, common stock
 repurchased and canceled at
 $0.01 per share                                  (3,000,000)         (3,000)         (27,000)               -

September 30, 2000, common
 stock issued for cash at $0.10
 per share                                         2,000,000           2,000          198,000                 -

Net loss for the year ended April 30, 2001                 -               -                -         (484,597)
                                               --------------   --------------   --------------   --------------

Balance, April 30, 2001                            7,500,000           7,500          198,000         (888,456)

August 15, 2001, common stock
 issued for services at $0.10
 per share                                           200,000             200           19,800                -

September 15, 2001, common stock
 issued for conversion of related party
 debt at $0.10 per share                           2,144,830           2,145          212,338                -

September 15, 2001, common stock
 issued for conversion of debt at $0.10
 per share                                         6,027,870           6,028          596,759                -

September 20, 2001, common stock
 issued for conversion of debt at $0.10
 per share                                           533,333             533           52,800                -

October 2, 2001, common stock
 issued for conversion of debt at
 $0.10 per share                                     500,000             500           49,500                -

January 31, 2002, common stock issued
 for cash at $0.10 per share                         160,000             160           15,840                -

Net loss for the year ended April 30, 2002                 -               -                -         (174,206)
                                               --------------   --------------   --------------   --------------

Balance, April 30, 2002                           17,066,033          17,066        1,145,037       (1,062,662)

Net loss for the year ended April 30, 2003                 -               -                -         (125,564)
                                               --------------   --------------   --------------   --------------

Balance, April 30, 2003                           17,066,033    $     17,066     $  1,145,037     $ (1,188,226)
</TABLE>





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

                                       F-7

- --------------------------------------------------------------------------------
Annual Report - 2003                                                  Page 49
<PAGE>


<TABLE>
<CAPTION>
                      NET-FORCE SYSTEMS INC. AND SUBSIDIARY
                      Consolidated Statements of Cash Flows



                                                                                                For the Years
                                                                                               Ended April 30,
                                                                       2003                2002                2001
                                                                 ----------------    ----------------    ----------------

CASH FLOWS FROM OPERATING ACTIVITIES

<S>                                                              <C>                 <C>                 <C>
   Net loss                                                      $     (125,564)     $     (174,206)     $     (484,597)
   Adjustments to reconcile net loss to net cash
    used by operating activities:
     Common stock issued for services                                         -              20,000                   -
     Depreciation and amortization                                        7,499             101,873              18,241
     Loss on sale of asset                                                  523                 205                (491)
     Loss on abandonment of leasehold
      improvements                                                            -                   -               6,700
   Changes in assets and liabilities:
     (Increase) decrease in reserves and deposits                        28,391              (6,269)            (30,858)
     (Increase) decrease in accounts receivables                         11,720              (5,818)             (7,212)
     Decrease in prepaid expenses                                             -                   -              34,698
     (Increase) in other assets                                          (1,667)             (1,600)            (64,960)
     (Increase) in license                                                    -                   -            (100,000)
     Increase (decrease) in accounts payable                            (11,045)                448               5,243
     Increase in accrued interest                                         1,537              29,413              26,017
     Increase (decrease) in accrued interest - related party               (112)              4,732               4,243
     Increase (decrease) in accrued expense                                 (83)                  -              24,351
     Increase in accrued expenses - related party                        47,035                   -                   -
     Increase (decrease) in player deposit                                4,635             (26,826)             73,828
                                                                 ----------------    ----------------    ----------------

       Net Cash Used by Operating Activities                            (37,131)            (58,048)           (494,797)
                                                                 ----------------    ----------------    ----------------

CASH FLOWS FROM INVESTING ACTIVITIES

   Purchase of fixed assets                                                   -                (800)             (3,704)
   Proceeds from sale of fixed assets                                     2,883                 518               1,927
                                                                 ----------------    ----------------    ----------------

       Net Cash Provided (Used) by Investing Activities                   2,883                (282)             (1,777)
                                                                 ----------------    ----------------    ----------------

CASH FLOWS FROM FINANCING ACTIVITIES

   Payments on notes payable - related party                             (2,500)            (36,300)                  -
   Proceeds from notes payable - related party                                -             113,800             128,597
   Proceeds from notes payable                                                -                   -              50,000
   Increase in stock subscription payable                                     -                   -              50,000
   Common stock issued for cash                                               -              16,000             200,000
   Repurchase of and cancellation of common stock                             -                   -             (30,000)
                                                                 ----------------    ----------------    ----------------

       Net Cash Provided (Used) by Financing Activities          $       (2,500)     $       93,500      $      398,597
                                                                 ----------------    ----------------    ----------------





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

                                       F-8

- --------------------------------------------------------------------------------
Annual Report - 2003                                                  Page 50
<PAGE>


<CAPTION>
                      NET-FORCE SYSTEMS INC. AND SUBSIDIARY
                Consolidated Statements of Cash Flows (Continued)



                                                                                                For the Years
                                                                                               Ended April 30,
                                                                       2003                2002                2001
                                                                 ----------------    ----------------    ----------------

<S>                                                              <C>                 <C>                 <C>
NET INCREASE (DECREASE) IN CASH                                  $      (36,748)     $       35,170      $      (97,977)

CASH AT BEGINNING OF PERIOD                                              68,462              33,292             131,269
                                                                 ----------------    ----------------    ----------------

CASH AT END OF PERIOD                                            $       31,714      $       68,462      $       33,292
                                                                 ================    ================    ================

CASH PAID FOR:

   Interest                                                      $          112      $            -      $       50,000
   Income taxes                                                  $            -      $            -      $            -

NON-CASH FINANCING ACTIVITIES:

Issuance of common stock for services                            $            -      $       20,000      $            -
Issuance of common stock for conversion of debt                  $            -      $      706,120      $            -
Issuance of common stock for conversion of
 related party debt                                              $            -      $      214,483      $            -
</TABLE>



























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

                                       F-9

- --------------------------------------------------------------------------------
Annual Report - 2003                                                  Page 51
<PAGE>






                      NET-FORCE SYSTEMS INC. AND SUBSIDIARY
                 Notes to the Consolidated Financial Statements
                          April 30, 2003, 2002 and 2001


NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

The Company was incorporated on March 1, 1999 under the  International  Business
Corporations  Act No. 28 of 1982 of the laws of Antigua and Barbuda as Net-Force
Systems Inc.

The  Company  will be engaged in all  business  activities  permitted  under the
International  Business  Corporations Act of 1982 except International  Banking,
Trust and Insurance.  It will  generally  carry on the business of an investment
and holding company.

On August 5, 1999,  a  wholly-owned  subsidiary,  Net Force  Entertainment  Inc.
(Entertainment),  was incorporated under the International Business Corporations
Act No. 28 of 1982 of the laws of Antigua and Barbuda.  This subsidiary  company
will be engaged in all aspect of International  betting,  gaming, sports betting
and bookmaking but with a major emphasis on internet gaming.

The Company  reentered the development stage in the first fiscal quarter of 2004
due to the  sale of  Entertainment  to a  company  controlled  by the  Company's
president (See Note 11).


NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

     a.   Accounting Method

     The Company's financial statements are prepared using the accrual method of
     accounting. The Company has elected an April 30 year-end.

     b.   Basic Loss Per Share

     Basic  loss per share has been  calculated  based on the  weighted  average
     number of shares of common stock outstanding during the period.

<TABLE>
<CAPTION>
                                                                                    For the Years
                                                                                   Ended April 30,
                                                           2003                2002                2001
                                                     ----------------    ----------------    ----------------
          Basic loss per share:

<S>                                                  <C>                 <C>                 <C>
          Numerator - net loss from discontinued
           operations                                $     (125,564)     $     (174,206)     $     (484,597)

          Denominator - weighted
           average number of
           shares outstanding                            17,066,033          13,375,186           7,171,233

          Loss per share                             $        (0.01)     $        (0.01)     $        (0.07)
                                                     ================    ================    ================
</TABLE>










                                      F-10

- --------------------------------------------------------------------------------
Annual Report - 2003                                                  Page 52
<PAGE>






                      NET-FORCE SYSTEMS INC. AND SUBSIDIARY
                 Notes to the Consolidated Financial Statements
                          April 30, 2003, 2002 and 2001


NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Continued)

     c.   Provision for Taxes

     The  Company's  operations  are  within  the  Jurisdiction  of St.  John's,
     Antigua, where there is no corporate income tax.

     d.   Cash and Cash Equivalents

     The Company considers all highly liquid investment with a maturity of three
     months or less when purchased to be cash equivalent.

     e.   Principles of Consolidation

     The April 30, 2003 financial  statements are consolidated  with the Company
     and Entertainment.  All significant  intercompany  accounts and transaction
     have been eliminated.

     f.   Property and Equipment

     Office  equipment and leasehold  improvements  are recorded at cost.  Minor
     additions and renewals are expensed in the year incurred.  Major  additions
     and renewals are capitalized and  depreciated  over their estimated  useful
     lives. Depreciation of office equipment is computed using the straight-line
     method over the estimated useful life of the asset of 5 years. Vehicles are
     depreciated over a life of 5 years using the straight-line method. Software
     is  depreciated  over  a  life  of  5  years.   Depreciation   expense  for
     discontinued  operations for the years ended April 30, 2003,  2002 and 2001
     was $7,499, $8,539, and $9,908, respectively.

          Property and equipment consists of the following:

                                                         April 30,
                                                  2003                2002
                                            ----------------    ----------------

          Vehicles                          $            -      $        3,704
          Computer equipment                        16,450              18,450
          Computer software                         10,000              10,000
          Office furniture and equipment             6,521               6,741
          Accumulated depreciation                 (25,788)            (20,807)
                                            ----------------    ----------------

          Net Property and Equipment        $        7,183      $      18,088
                                            ================    ================














                                      F-11

- --------------------------------------------------------------------------------
Annual Report - 2003                                                  Page 53
<PAGE>


                      NET-FORCE SYSTEMS INC. AND SUBSIDIARY
                 Notes to the Consolidated Financial Statements
                          April 30, 2003, 2002 and 2001


NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Continued)

     g.   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.

     h.   Recent Accounting Pronouncements

     SFAS No. 145 -- On April 30, 2002,  the FASB issued FASB  Statement No. 145
     ------------
     (SFAS 145),  "Rescission of FASB Statements No. 4, 44, and 64, Amendment of
     FASB Statement No. 13, and Technical  Corrections."  SFAS 145 rescinds both
     FASB  Statement  No.  4  (SFAS  4),   "Reporting   Gains  and  Losses  from
     Extinguishment of Debt," and the amendment to SFAS 4, FASB Statement No. 64
     (SFAS  64),   "Extinguishments   of  Debt  Made  to  Satisfy   Sinking-Fund
     Requirements." Through this rescission, SFAS 145 eliminates the requirement
     (in both SFAS 4 and SFAS 64) that gains and losses from the  extinguishment
     of debt be  aggregated  and, if material,  classified  as an  extraordinary
     item,  net of the  related  income tax  effect.  However,  an entity is not
     prohibited from classifying  such gains and losses as extraordinary  items,
     so long as it meets the criteria in paragraph 20 of  Accounting  Principles
     Board Opinion No. 30,  Reporting  the Results of  Operations  Reporting the
     Effects of Disposal of a Segment of a Business, and Extraordinary,  Unusual
     and  Infrequently  Occurring  Events and  Transactions.  Further,  SFAS 145
     amends  paragraph 14(a) of FASB Statement No. 13,  "Accounting for Leases",
     to eliminate an  inconsistency  between the accounting  for  sale-leaseback
     transactions  and certain lease  modifications  that have economic  effects
     that are similar to  sale-leaseback  transactions.  The amendment  requires
     that a lease modification (1) results in recognition of the gain or loss in
     the 9  financial  statements,  (2) is  subject  to FASB  Statement  No. 66,
     "Accounting  for Sales of Real  Estate," if the leased asset is real estate
     (including integral equipment), and (3) is subject (in its entirety) to the
     sale-leaseback  rules of FASB  Statement  No. 98,  "Accounting  for Leases:
     Sale-Leaseback  Transactions  Involving Real Estate,  Sales-Type  Leases of
     Real  Estate,  Definition  of the Lease Term,  and Initial  Direct Costs of
     Direct Financing Leases." Generally,  FAS 145 is effective for transactions
     occurring after May 15, 2002. The Company does not expect that the adoption
     of SFAS 145 will have a material  effect on its  financial  performance  or
     results of operations.

















                                      F-12

- --------------------------------------------------------------------------------
Annual Report - 2003                                                  Page 54
<PAGE>


                      NET-FORCE SYSTEMS INC. AND SUBSIDIARY
                 Notes to the Consolidated Financial Statements
                          April 30, 2003, 2002 and 2001


NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Continued)

     h.   Recent Accounting Pronouncements (Continued)

     SFAS No. 146 -- In June 2002, the FASB issued SFAS No. 146, "Accounting for
     ------------
     Exit or Disposal  Activities"  (SFAS 146).  SFAS 146 addresses  significant
     issues regarding the recognition,  measurement, and reporting of costs that
     are associated with exit and disposal activities,  including  restructuring
     activities that are currently accounted for under EITF No. 94-3, "Liability
     Recognition for Certain  Employee  Termination  Benefits and Other Costs to
     Exit an Activity  (including  Certain Costs Incurred in a  Restructuring)."
     The scope of SFAS 146 also includes costs related to terminating a contract
     that is not a capital lease and termination benefits that employees who are
     involuntarily  terminated  receive  under the terms of a  one-time  benefit
     arrangement  that is not an ongoing  benefit  arrangement  or an individual
     deferred-compensation  contract.  SFAS  146 will be  effective  for exit or
     disposal  activities  that are initiated  after December 31, 2002 and early
     application is  encouraged.  The provisions of EITF No. 94-3 shall continue
     to apply  for an exit  activity  initiated  under an exit plan that met the
     criteria of EITF No. 94-3 prior to the  adoption of SFAS 146. The effect on
     adoption of SFAS 146 will change on a prospective  basis the timing of when
     the  restructuring  charges are recorded from a commitment date approach to
     when the  liability  is  incurred.  The  Company  does not expect  that the
     adoption  of  SFAS  146  will  have a  material  effect  on  its  financial
     performance or results of operations.

     SFAS  No.  147 -- In  October  2002,  the FASB  issued  Statement  No.  147
     --------------
     "Acquisitions  of Certain  Financial  Institutions  - an  amendment of FASB
     Statements No. 72 and 144 and FASB  Interpretation  No. 9" (SFAS 147). SFAS
     147 removes  acquisitions of financial  institutions from the scope of both
     Statement 72 and  Interpretation 9 and requires that those  transactions be
     accounted  for  in  accordance  with  FASB  Statements  No.  141,  Business
     Combinations,  and No. 142, Goodwill and Other Intangible Assets. Thus, the
     requirement in paragraph 5 of Statement 72 to recognize  (and  subsequently
     amortize) any excess of the fair value of liabilities assumed over the fair
     value  of  tangible  and  identifiable  intangible  assets  acquired  as an
     unidentifiable  intangible  asset no longer applies to acquisitions  within
     the scope of this  Statement.  In  addition,  this  Statement  amends  FASB
     Statement No. 144,  Accounting for the Impairment or Disposal of Long-Lived
     Assets, to include in its scope long-term customer-relationship  intangible
     assets    of    financial    institutions    such   as    depositor-    and
     borrower-relationship  intangible assets and credit  cardholder  intangible
     assets.  Consequently,  those  intangible  assets  are  subject to the same
     undiscounted cash flow  recoverability test and impairment loss recognition
     and measurement provisions that Statement 144 requires for other long-lived
     assets that are held and used.  SFAS 147 is effective  October 1, 2002. The
     Company  does not expect that the adoption of SFAS 147 will have a material
     effect on its consolidated financial statements.















                                      F-13

- --------------------------------------------------------------------------------
Annual Report - 2003                                                  Page 55
<PAGE>


                      NET-FORCE SYSTEMS INC. AND SUBSIDIARY
                 Notes to the Consolidated Financial Statements
                          April 30, 2003, 2002 and 2001


NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Continued)

     h.   Recent Accounting Pronouncements (Continued)

     SFAS No. 148 -- In December 2002, the FASB issued SFAS No. 148, "Accounting
     ------------
     for Stock-Based Compensation -- Transition and Disclosure"(SFAS 148"). SFAS
     148 amends SFAS No. 123 "Accounting for  Stock-Based  Compensation"  ("SFAS
     123"), 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,  SFAS 148 amends the disclosure requirements of
     SFAS 123 to  require  prominent  disclosures  in both  annual  and  interim
     financial  statements  about  the  method  of  accounting  for  stock-based
     employee  compensation  and the  effect  of the  method  used  on  reported
     results.  SFAS 148 is effective for fiscal years  beginning  after December
     15, 2002.  The interim  disclosure  provisions  are effective for financial
     reports containing financial statements for interim periods beginning after
     December 15, 2002. The Company is currently  evaluating the effect that the
     adoption of SFAS 148 will have on its results of  operations  and financial
     condition.

     SFAS No.  149 - In April  2003,  the FASB  issued  Statement  of  Financial
     -------------
     Accounting  Standards No. 149 ("SFAS 149"),  "Amendment of Statement 133 on
     Derivative Instruments and Hedging Activities", to provide clarification on
     the meaning of an  underlying,  the  characteristics  of a derivative  that
     contains financing  components and the meaning of an initial net investment
     that is smaller than would be required  for other types of  contracts  that
     would be expected to have a similar  response to changes in market factors.
     This statement will be applied prospectively and is effective for contracts
     entered  into or  modified  after  June 30,  2003.  The  statement  will be
     applicable  to  existing  contracts  and new  contracts  relate to  forward
     purchases or sales of when-issued  securities or other  securities  that do
     not yet exist.  The Company  does not expect that the  adoption of SFAS 149
     will  have a  material  effect  on  the  Company's  consolidated  financial
     statements.

     SFAS  No.  150 - In May  2003,  the  FASB  issued  Statement  of  Financial
     --------------
     Accounting Standards No 159 ("SFAS 150"),  Accounting for certain financial
     instruments  with  characteristics  of both  liabilities  and equity.  This
     statement  establishes  standards for how an issuer classifies and measures
     certain financial  instruments with characteristics of both liabilities and
     equity. This statement will be effective for financial  instruments entered
     into or modified  after May 31,  2003,  and  otherwise  is effective at the
     beginning of the first interim period  beginning after June 15, 2003. It is
     to be  implemented  by reporting  the  cumulative  effect of a change in an
     accounting principal for financial  instruments created before the issuance
     date of the statement  and existing at the beginning of the interim  period
     of adoption. The Company does not expect that the adoption of SFAS 150 will
     have material effect on the Company's consolidated financial statements.














                                      F-14

- --------------------------------------------------------------------------------
Annual Report - 2003                                                  Page 56
<PAGE>


                      NET-FORCE SYSTEMS INC. AND SUBSIDIARY
                 Notes to the Consolidated Financial Statements
                          April 30, 2003, 2002 and 2001


NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Continued)

     i.   Revenue Recognition Policy

     The  Company  has  recognized  as  revenue  the net  winnings  from  gaming
     activities, which is the difference between gaming winnings and losses. The
     earnings  process is  complete  upon  receipt of the net  winnings,  and no
     further obligations exist to the customer.

     Cost of sales  includes  royalties  payable to Softec,  incurred  on Casino
     activity and bank discount fees incurred by the Company for the  acceptance
     of credit cards.

     The formula for net revenue sharing is as follows: (Casino gain (loss) less
     adjustment for  incentives  less charge backs) times a royalty factor to be
     paid to Softec. The royalty factor used depends on net monthly revenue. The
     following table lists the schedule of royalty payments:

          Net Monthly RevenueRoyalty Fee Payable
          0 to $500,000                                         25%
          $500,001 to $1,000,000                                20%
          $1,000,001 to $5,000,000                              15%
          $5,000,001 to $10,000,000                             12.5%
          $10,000,001 plus                                      10%

     The  Company  renegotiated  the 25% factor  down to 15% for the period from
     September  2000  through  August  2000,  after which the factor rose to 25%
     again.

     j.   Advertising

     The  Company  follows the policy of charging  the costs of  advertising  to
     expense as  incurred.  Advertising  expense for the years  ending April 30,
     2003, 2002 and 2001 was $7,890, $34,681 and $174,859, respectively.

     k.   Long-Lived Assets

     In Accordance with SFAS No. 144, "Accounting for the Impairment or Disposal
     of Long-Lived  Assets" which is effective for financial  statements  issued
     for fiscal years  beginning  after  December 15, 2001 and,  generally,  its
     provisions  are to be  applied  prospectively.  SFAS  144  supercedes  SFAS
     Statement No. 121 (FAS 121),  "Accounting  for the Impairment of Long-Lived
     Assets and  Long-Lived  Assets to be Disposed  Of". SFAS 144 applies to all
     long-lived  assets  (including  discontinued  operations) and  consequently
     amends  Accounting  Principles  Board  Opinion No. 30 (APB 30),  "Reporting
     Results of  Operations  Reporting the Effects of Disposal of a Segment of a
     Business".

     SFAS 144 develops one accounting model (based on the model in SFAS 121) for
     long-lived  assets that are to be disposed of by sale, as well as addresses
     the principal  implementation  issues.  SFAS 144 requires  that  long-lived
     assets  that are to be disposed of by sale be measured at the lower of book
     value or fair  value less cost to sell.  That  requirement  eliminates  the
     requirement  of APB 30 that  discontinued  operations  be  measured  at net
     realizable value or that entities include under  `discontinued  operations'
     in the financial  statements amounts for operating losses that have not yet
     occurred.






                                      F-15

- --------------------------------------------------------------------------------
Annual Report - 2003                                                  Page 57
<PAGE>


                      NET-FORCE SYSTEMS INC. AND SUBSIDIARY
                 Notes to the Consolidated Financial Statements
                          April 30, 2003, 2002 and 2001


NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (Continued)

     l.   Foreign Currency Translation

     Monetary  assets and  liabilities  denominated  in foreign  currencies  are
     translated  into United  States  dollars at the period end  exchange  rate.
     Non-monetary  assets are translated at the historical exchange rate and all
     income and expenses are translated at the exchange rates prevailing  during
     the period.

     Foreign  exchange  currency  translation  adjustments  are  included in the
     stockholders'  equity section as other  comprehensive  income.  The Company
     operates with East Caribbean Dollars (EC). The exchange rate between the EC
     and the United  States  Dollar  (USD) is always  constant  at .37453.  This
     constant  exchange  rate makes it  unnecessary  to have a foreign  exchange
     translation adjustment in the stockholder's equity section.

     m.   Concentrations of Risk - Foreign Operations

     The  Company  operates  in  St.  John's  which  has a  developing  economy.
     Hyperinflation  and rapid political and legal change,  often accompanied by
     military  insurrection,  have been  common in certain  emerging  markets in
     which the  Company may conduct  operations.  The Company may be  materially
     adversely  affected by possible  political  or economic  instability  in St
     John's.  The risks  include,  but are not  limited to  terrorism,  military
     repression, expropriation, changing fiscal regimes, high rates of inflation
     and the  absence of  industrial  and  economic  infrastructure.  Changes in
     development or investment  policies or shifts in the  prevailing  political
     climate in St. John's in which the Company  operates could adversely affect
     the Company's  business.  Operations may be affected in varying  degrees by
     government  regulations  with respect to  development  restrictions,  price
     controls,  export  controls,  income  and  other  taxes,  expropriation  of
     property, maintenance of claims, environmental legislation, labor, welfare,
     benefit policies,  land use, land claims of local residents,  water use and
     mine safety. The effect of these factors cannot be accurately predicted.

NOTE 3 - NOTE PAYABLE - RELATED PARTY

<TABLE>
<CAPTION>
                                                                         April 30,
                                                                         ---------
                                                                  2003                2002
                                                            ----------------    ----------------
<S>                                                         <C>                 <C>
          Geneva Overseas Holdings Ltd. (A company
           controlled by the president of the Company)
           made advances to the Company totaling
           $2,500.  These advances have an interest
           rate of 8% annually.  This note was unsecured.   $            -      $        2,500

          Less Current Portion                                           -               2,500
                                                            ----------------    ----------------

          Total Long-Term Debt -Related Party               $            -      $            -
                                                            ================    ================

          Interest  expense for the years ending  April 30, 2003,  2002 and 2001
          was $-0-, $4,732 and $4,243, respectively.
</TABLE>








                                      F-16

- --------------------------------------------------------------------------------
Annual Report - 2003                                                  Page 58
<PAGE>


                      NET-FORCE SYSTEMS INC. AND SUBSIDIARY
                 Notes to the Consolidated Financial Statements
                          April 30, 2003, 2002 and 2001


NOTE 4 - GOING CONCERN

The Company's  consolidated  financial  statements are prepared using  generally
accepted accounting  principles applicable to a going concern which contemplates
the realization of assets and liquidation of liabilities in the normal course of
business.  The Company has incurred losses from its inception  through April 30,
2003 and has a significant working capital deficit. The Company does not have an
established source of revenues  sufficient to cover its operating costs to allow
it to continue as a going  concern.  It is the intent of the Company to sell its
wholly-owned  subsidiary to exit from the internet  gaming  business and to seek
another  valid  business  to  become  a  wholly-owned   subsidiary.   The  major
shareholders  are  committed  to provide  the  necessary  funds to  operate  the
Company.


NOTE 5 - STOCK TRANSACTIONS

On July 1, 2000, the Company repurchased and canceled 3,000,000 shares of common
stock at $0.01 per share or $30,000 of cash.

On September 30, 2000,  the Company issued  2,000,000  shares of common stock at
$0.10 per share for $200,000 of cash.

On August 15, 2001,  the Company issued 200,000 shares of common stock valued at
$0.10 per share, to a director for services and consulting.

On September 15, 2001,  the Company  converted the related party note payable of
$208,121 and accrued interest of $6,362 into equity by issuing  2,144,830 shares
of common stock at $0.10 per share for a total of $214,483.

On  September  15,  2001,  the Company  converted a note payable of $495,000 and
accrued  interest of $107,787 into equity by issuing  6,027,830 shares of common
stock at $0.10 per share for a total of $602,787.

On  September  20,  2001,  the Company  converted a note  payable of $50,000 and
accrued interest of $3,333 into equity by issuing 533,333 shares of common stock
at $0.10 per share for a total of $53,333.

On October 2, 2001,  the Company  issued  500,000 shares of common stock for the
subscription payable of $50,000 at $0.10 per share.

On January 31, 2002,  the Company issued 160,000 shares of common stock at $0.10
per share for cash of $16,000.












                                      F-17

- --------------------------------------------------------------------------------
Annual Report - 2003                                                  Page 59
<PAGE>


                      NET-FORCE SYSTEMS INC. AND SUBSIDIARY
                 Notes to the Consolidated Financial Statements
                          April 30, 2003, 2002 and 2001


NOTE 6 - COMMITMENTS AND CONTINGENCIES

     Software Licensing Agreement
     ----------------------------

     In the first quarter of 1999, the Company entered into a software licensing
     agreement  with  Softec  Systems  Caribbean  Inc.   (Softec),   to  provide
     online-gaming  software and hardware services.  The license agreement calls
     for a  commitment  by the Company to spend a minimum of 10% of the previous
     months net revenue  (based on a yearly  average) for ongoing  promotion and
     marketing.  The marketing  obligation only applies to the first 365 days of
     operation.  The license  agreement  also calls for sharing of net  revenues
     based on a  specific  formula  agreed to by the  Company  and  Softec.  The
     license  agreement  may be  terminated  by the  Company  at the  end of any
     one-year  term or by Softec at the end of any one-year  term  subsequent to
     the first year of the agreement.

     All of the  Company's  websites  and  advertising  are  directly  linked to
     Softec's  software.  Softec  manages the software as well as the upkeep and
     maintenance.  The  Company  is highly  dependent,  therefore,  on  Softec's
     ability to maintain the software and keep it running. In the event that the
     software  fails,  the Company's  business and operations  could be strongly
     affected.


NOTE 7 - RESERVES AND DEPOSITS WITH CREDIT CARD PROCESSORS

Reserves and deposits with credit card  processors  consist of rolling  reserves
held by  merchant  banks and  funds  for  transactions  processed  and  awaiting
transfer to the  Company's  bank  accounts.  As of April 30, 2003 and 2002,  the
balance of these reserves and deposits were $30,927 and $63,953, respectively.


NOTE 8 - PLAYER DEPOSITS

As  of  April  30,  2003  and  2002,   the  Company  had  $51,637  and  $47,002,
respectively,  in cash representing  funds held on deposit in the form of e-cash
balances. These deposits are non-interest bearing and repayable on demand. These
deposits are actually held by a third party for the benefit of the Company.


NOTE 9 - GAMING LICENSE

The Company was  required  to  purchase a gaming  business  license on an annual
basis.  The cost of the license  was $20,000 for 2002 and was  $100,000 in 2001,
and is amortized over twelve months.  Amortization  expense for the years ending
April 30,  2003,  2002,  and 2001 was $-0-,  $93,334 and  $8,333,  respectively.
During 2003, the Company operated under the Master license of World Gaming, thus
they were not required to purchase their own license.


NOTE 10 - OPERATING LEASE

     Office lease
     ------------

     On August 1, 2001, the Company signed a one-year lease agreement for office
     space.  This lease ran through July 3, 2002.  The monthly  rental amount is
     $629.  Subsequent  to July 3, 2002,  the Company  went to a monthly  office
     lease.





                                      F-18

- --------------------------------------------------------------------------------
Annual Report - 2003                                                  Page 60
<PAGE>


                      NET-FORCE SYSTEMS INC. AND SUBSIDIARY
                 Notes to the Consolidated Financial Statements
                          April 30, 2003, 2002 and 2001


NOTE 11 - SUBSEQUENT EVENTS

     Discontinued Operations
     -----------------------

     In June 2003, the Company's Board of Directors entered into an agreement to
     sell  its   wholly-owned   subsidiary,   Net  Force   Entertainment,   Inc.
     (Entertainment)  to Geneva  Overseas  Holdings Ltd., a company owned by the
     Company's  President and CEO. The  consideration for the sale per the sales
     agreement was $100 plus the assumption of all outstanding debt. The Company
     no longer has any control over Entertainment. The following is a summary of
     the  discontinued  operations for the years ended April 30, 2003,  2002 and
     2001.

<TABLE>
<CAPTION>
                                                                           For the Years
                                                                          Ended April 30,
                                                                          ---------------
                                                  2003                2002                2001
                                            ----------------    ----------------    ----------------
          REVENUE

<S>                                         <C>                 <C>                 <C>
            Sales                           $      288,613      $      519,237      $      318,490
            Cost of sales                          212,445             282,020             217,769
                                            ----------------    ----------------    ----------------

              Gross Margin (Deficit)                76,168             237,217             100,721
                                            ----------------    ----------------    ----------------

          EXPENSES

            General and administrative             194,975             275,896             489,278
            Depreciation and amortization            7,499             101,873              18,241
                                            ----------------    ----------------    ----------------

              Total Expenses                       202,474             377,769             507,519
                                            ----------------    ----------------    ----------------

          LOSS FROM OPERATIONS                    (126,306)           (140,552)           (406,798)
                                            ----------------    ----------------    ----------------

          OTHER INCOME (EXPENSE)

            Loss on abandonment of leasehold
             improvements                                -                   -              (6,700)
            Gain on sale of assets                       -                   -                 491
            Loss on sale of assets                    (523)               (205)                  -
            Interest income                          1,135                 198               1,013
            Other income                             1,667                 494               7,656
            Interest expense                        (1,537)            (34,141)            (80,259)
                                            ----------------    ----------------    ----------------

              Total Other Income (Expense)             742             (33,654)            (77,799)
                                            ----------------    ----------------    ----------------

          PROVISION FOR INCOME TAX                       -                   -                   -
                                            ----------------    ----------------    ----------------

          NET LOSS                          $     (125,564)     $     (174,206)     $     (484,597)
                                            ================    ================    ================

          LOSS ON DISPOSAL OF SUBSIDIARY    $            -      $            -      $            -
                                            ================    ================    ================
</TABLE>




                                      F-19

- --------------------------------------------------------------------------------
Annual Report - 2003                                                  Page 61
<PAGE>


                      NET-FORCE SYSTEMS INC. AND SUBSIDIARY
                 Notes to the Consolidated Financial Statements
                          April 30, 2003, 2002 and 2001


NOTE 11 - SUBSEQUENT EVENTS (Continued)

     New Subsidiary
     --------------

     In June 2003, the Company  approved the creation a wholly-owned  subsidiary
     Atlantica  Resorts Ltd.  (Atlantica) to be incorporated in the Jurisdiction
     of  the  Territory  of  the  British  Virgin   Islands,   pursuant  to  the
     International Business Companies Act.

     Common Stock
     ------------

     On June 10, 2003,  the Company  authorized the issuance of 25,000 shares of
     common stock for  conversion of debt to equity valued at $0.10 per share or
     $2,500.




































                                      F-20

- --------------------------------------------------------------------------------
Annual Report - 2003                                                  Page 62



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