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<SEC-DOCUMENT>0001010549-03-000431.txt : 20030813
<SEC-HEADER>0001010549-03-000431.hdr.sgml : 20030813
<ACCEPTANCE-DATETIME>20030813144759
ACCESSION NUMBER:		0001010549-03-000431
CONFORMED SUBMISSION TYPE:	10QSB
PUBLIC DOCUMENT COUNT:		5
CONFORMED PERIOD OF REPORT:	20020630
FILED AS OF DATE:		20030813

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			MB SOFTWARE CORP
		CENTRAL INDEX KEY:			0000714256
		STANDARD INDUSTRIAL CLASSIFICATION:	COMPUTER PERIPHERAL EQUIPMENT, NEC [3577]
		IRS NUMBER:				592219994
		STATE OF INCORPORATION:			CO
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10QSB
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-11808
		FILM NUMBER:		03840675

	BUSINESS ADDRESS:	
		STREET 1:		2225 E RANDOL MILL RD
		STREET 2:		STE 305
		CITY:			ARLINGTON
		STATE:			TX
		ZIP:			76011
		BUSINESS PHONE:		8177928872

	MAIL ADDRESS:	
		STREET 1:		2225 EAST RANDOL MILL RD
		STREET 2:		SUITE 305
		CITY:			ARLINGTON
		STATE:			TX
		ZIP:			76011

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	INAV TRAVEL CORPORATION
		DATE OF NAME CHANGE:	19920703

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	TWISTEE TREAT CORP
		DATE OF NAME CHANGE:	19910220

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	TWISTEE FREEZ CORP
		DATE OF NAME CHANGE:	19840917
</SEC-HEADER>
<DOCUMENT>
<TYPE>10QSB
<SEQUENCE>1
<FILENAME>mb10qsb063002.txt
<TEXT>

                   U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                   FORM 10-QSB


[X]  QUARTERLY  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE ACT
     OF 1934

                  For the quarterly period ended: June 30, 2002

[ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

                           Commission File No. 0-11808

                             MB SOFTWARE CORPORATION


                    Texas                                       59-2220004
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                            Identification Number)

                      2225 E. Randol Mill Road - Suite 305
                           Arlington, Texas 76011-6306
                                 (817) 633-9400


Check  whether the Issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or
for 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 [ ] No [X ]


As of July 31, 2002,  822,810 of the Issuer's  $.001 par value common stock were
outstanding.

Transitional Small Business Disclosure Format
                                 Yes [ ] No [X]



<PAGE>

                    MB SOFTWARE CORPORATION AND SUBSIDIARIES

                                   Form 10-QSB

                           Quarter Ended June 30, 2002

PART I - FINANCIAL INFORMATION

Item 1 - Financial Statements

Consolidated Balance Sheet (Unaudited)........................................ 1

Consolidated Statements of Operations for the three and six months ended
        June 30, 2002 and 2001 (Unaudited).................................... 2

Consolidated Statements of Cash Flows for the six months ended
        June 30, 2002 and 2001 (Unaudited).................................... 3



<PAGE>

                    MB SOFTWARE CORPORATION AND SUBSIDIARIES
                     CONSOLIDATED BALANCE SHEET (unaudited)
                                  JUNE 30, 2002

ASSETS

Total Assets                                                        $      --
                                                                    ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
   Checks in excess of bank balance                                 $     9,787
   Notes payable (Note 5)                                             2,004,062
   Accounts payable (Note 5)                                            346,859
   Accrued interest (Note 5)                                             95,324
                                                                    -----------
Total current liabilities                                             2,456,032
                                                                    -----------

Stockholders' Deficit
   Preferred stock, $10 par value, 5,000,000 shares authorized;
      issued and outstanding - none                                        --
   Common stock:  $0.001 par value;  20,000,000 shares authorized;
      issued in and outstanding - 822,810 shares                            823
   Additional paid-in capital                                         6,385,174
   Accumulated deficit                                               (8,829,990)
                                                                    -----------
                                                                     (2,443,993)
   Less, treasury stock, at cost;  4,089 shares                         (12,039)
                                                                    -----------
Total stockholders' deficit                                          (2,456,032)
                                                                    -----------
Total liabilities and stockholders' deficit                         $      --
                                                                    ===========


























           See condensed notes to consolidated financial statements.


                                       1
<PAGE>
<TABLE>
<CAPTION>
                    MB SOFTWARE CORPORATION AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
            FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2002 AND 2001

                                               Three months     Three months     Six months       Six months
                                                  ended            ended            ended            ended
                                              June 30, 2002    June 30, 2001    June 30, 2002    June 30, 2001
                                              ----------------------------------------------------------------
<S>                                           <C>              <C>              <C>              <C>
Revenues                                      $        --      $        --      $        --      $        --
Cost of revenues                                       --               --               --               --
                                              ----------------------------------------------------------------
Gross profit                                           --               --               --               --

Operating Expenses
   Selling, general and administrative             (326,534)        (215,335)        (630,019)        (473,985)
                                              ----------------------------------------------------------------

Loss from operations                               (326,534)        (215,335)        (630,019)        (473,985)

Other Income (Expense)
   Write off net assets of Portalook               (292,347)            --           (292,347)            --
   Write off of receivables - related party        (397,359)            --           (397,359)            --
   Interest expense                                 (22,984)         (67,187)        (187,124)        (102,423)
   Interest income                                    6,586            7,090           14,497           14,101
                                              ----------------------------------------------------------------
Total other income (expense)                       (706,104)         (60,097)        (862,333)         (88,322)

                                              ----------------------------------------------------------------
Loss before benefit for income taxes             (1,032,638)        (275,432)      (1,492,352)        (562,307)

Benefit for income taxes                             70,625           34,655           78,676          120,248
                                              ----------------------------------------------------------------

Loss from continuing operations                    (962,013)        (240,777)      (1,413,676)        (442,059)

Discontinued operations, net of tax effect          137,092           67,274          152,720          233,423
                                              ----------------------------------------------------------------

Net loss                                      $    (824,921)   $    (173,503)   $  (1,260,956)   $    (208,636)
                                              ================================================================


Loss from continuing operations               $    (962,013)   $    (240,777)   $  (1,413,676)   $    (442,059)
Plus cumulative preferred stock dividends           (28,333)         (85,000)        (113,333)        (170,000)
                                              ----------------------------------------------------------------
Loss available to common stockholders         $    (990,346)   $    (325,777)   $  (1,527,009)   $    (612,059)
                                              ================================================================

Basic and Diluted Loss Per Share:
   Continuing operations                      $       (1.26)   $       (0.35)   $       (1.89)   $       (0.64)
   Discontinued operations                             0.18             0.10             0.20             0.34
                                              ----------------------------------------------------------------
                                              $       (1.08)   $       (0.25)   $       (1.69)   $       (0.30)
                                              ================================================================

Weighted average common shares outstanding          763,854          692,000          747,423          692,000
                                              ================================================================
</TABLE>













           See condensed notes to consolidated financial statements.

                                       2
<PAGE>
<TABLE>
<CAPTION>

                    MB SOFTWARE CORPORATION AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
                     SIX MONTHS ENDED JUNE 30, 2002 AND 2001

                                                                                       2002           2001
                                                                                   --------------------------
<S>                                                                                <C>            <C>
Cash Flows From Operating Activities
Loss from continuing operations                                                    $(1,413,676)   $  (442,059)
Adjustments to reconcile loss from continuing operations to net cash used in
      operating activities:
   Depreciation and amortization                                                        71,480          1,299
   Common stock issued for services and consulting costs                                46,000         18,750
   Deferred licensing costs                                                               --           11,783
   Accretion of debt                                                                    68,747           --
   Disposal of fixed assets                                                              5,038           --
   Write off net assets of Portalook                                                   292,347           --
   Write off related party notes receivable and accrued interest receivable            397,359           --
Changes in assets and liabilities:
   (Increase) decrease in prepaid expenses and other                                   (12,919)        (4,390)
    Increase (decrease) in accounts payable                                             20,747        (36,085)
    Increase (decrease) in accrued liabilities                                          26,358         (1,534)
                                                                                   --------------------------
Net cash used in continuing operations                                                (498,519)      (452,236)
Net cash from discontinued operations                                                 (138,176)        91,159
                                                                                   --------------------------
Net cash used in operating activities                                                 (636,695)      (361,077)
                                                                                   --------------------------

Cash Flows From Investing Activities
   Capital expenditures                                                                   --           (1,701)
                                                                                   --------------------------
Net cash used in investing activities                                                     --           (1,701)

Cash Flows From Financing Activities
   Bank overdraft                                                                      (13,785)        38,270
   Common stock issued for cash                                                          1,000           --
   Principal payments on capital leases                                                   --           (1,494)
   Principal payments on borrowings                                                    (68,226)          --
   Proceeds from new borrowings                                                        717,706        288,550
                                                                                   --------------------------
Net cash provided by financing activities                                              636,695        325,326
                                                                                   --------------------------

Increase (decrease) in cash                                                               --          (37,452)
Cash and cash equivalents, beginning of period                                            --           37,452
                                                                                   --------------------------
Cash and cash equivalents, end of period                                           $      --      $      --
                                                                                   ==========================

Cash paid during the period for interest                                           $    66,911    $    54,655
                                                                                   ==========================

Supplemental noncash investing and financing activities:
Fair value of assets exchanged in connection with the Restructure and Settlement
      Agreement dated November 5, 2001 (settled May 8, 2002) (Note 3)              $ 3,943,928    $      --
                                                                                   ==========================
Notes receivable, impaired                                                         $   397,359    $      --
                                                                                   ==========================
</TABLE>


           See condensed notes to consolidated financial statements.

                                       3
<PAGE>

                    MB SOFTWARE CORPORATION AND SUBSIDIARIES

                             MB SOFTWARE CORPORATION
                           QUARTER ENDED JUNE 30, 2002
                        NOTES TO THE FINANCIAL STATEMENTS

NOTE 1: BASIS OF PRESENTATION

The accompanying  unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles in the United States
of America for interim  financial  information and with the instructions to Form
10-QSB and Rule 10-01 of  Regulations  S-X. They do not include all  information
and notes  required by generally  accepted  accounting  principles in the United
States  of  America  for  complete  financial  statements.  However,  except  as
disclosed, there has been no material change in the information disclosed in the
notes to consolidated financial statements included in the Annual Report on Form
10-KSB of MB Software  Corporation (the Company) for the year ended December 31,
2001.  In the  opinion of  management,  all  adjustments  (consisting  of normal
recurring  accruals)  considered  necessary  for a fair  presentation  have been
included in the operating  results for the six month period ended June 30, 2002,
and are not  necessarily  indicative of the results that may be expected for the
year ending December 31, 2002.

NOTE 2: GOING CONCERN

The financial  statements  have been prepared on a going  concern  basis,  which
contemplates  realization  of  assets  and  liquidation  of  liabilities  in the
ordinary course of business.  The Company has continuously  incurred losses from
operations and has a significant  accumulated  deficit.  The  appropriateness of
using the going concern basis is dependent upon the Company's  ability to obtain
additional  financing or equity capital and,  ultimately,  to achieve profitable
operations.  These  conditions  raise  substantial  doubt  about its  ability to
continue  as a going  concern.  The  financial  statements  do not  include  any
adjustments that might result from the outcome of this uncertainty.

The Company does not  currently  have any business  operations.  The Company has
explored the  possibility of selling or merging with another  Company.  Although
the  Company  has not  entered  into any  binding  agreement  to  effect  such a
transaction, the board of directors of the Company does consider such offers and
would  consider all of the terms of any such offer as part of its fiduciary duty
to  determine  whether  any  such  transaction  is in the best  interest  of the
Company's stockholders.  If the board of directors does determine that a sale or
merger of the Company is in the best  interests of the  Company's  stockholders,
the board of  directors  may  determine  to pursue  such a  transaction  and the
consideration  to be paid in connection with such  transaction  would be used to
expand our  business  and fund future  operations.  There is not  assurance  the
Company can raise funds through a sale or equity transaction, or if such funding
is available, that it will be on favorable terms.

The Company  faces all the risks  common to  companies  in their early stages of
development,  including  undercapitalization and uncertainty of funding sources,
high initial  expenditure  levels and  uncertain  revenue  streams,  an unproven
business  model,  and  difficulties in managing  growth.  The Company expects to
incur  losses as it expands its business  and will  require  additional  funding
during  the  next  twelve  months.   The  satisfaction  of  the  Company's  cash
requirements  hereafter will depend in large part on its ability to successfully
raise capital from external sources to fund operations. As a result, the Company
expects to aggressively  pursue additional sources of funds,  including debt and
equity  offerings.  The Company  plans to raise  capital by obtaining  financing
through private debt and or equity placements.  Management  believes that if the
Company is successful in those private placement efforts,  then the Company will
have  sufficient  capital to continue its operations  until the Company  becomes
profitable. To date, the Company has not been profitable.



                                       4
<PAGE>

NOTE 3: SALE OF BUSINESS

On May 8, 2002, the Company agreed to the Restructure  and Settlement  Agreement
with Imagine  Investments,  Inc.  (Imagine).  In accordance  with the agreement,
proceeds  ($4,634,203)  represented the conversion of 340,000 shares of Series A
Convertible  Preferred  Stock  ($3,400,000),  dividends  in  arrears  ($45,644),
convertible  debt ($800,000) and accrued  interest on the debt  ($388,559),  all
held by Imagine,  into 4,500,000 shares of common stock and the Company conveyed
to Imagine its  ownership in NFPM.  The fair market  value of the  consideration
given was $690,275,  representing the net assets in NFPM ($629,999) and the fair
market value of the 4,500,000 shares of common stock ($60,276).  No gain or loss
on  the  transaction  with  the  preferred   stockholder  was  recognized.   The
transaction  resulted in a net increase in stockholders' equity of approximately
$850,000.  The  calculation  of the gain or loss did not include  $1,178,977  of
cumulative  preferred  stock  dividends,  which were not  required to be paid to
Imagine as part of the sale. These dividends were cumulative but have never been
declared as a result of past net losses.  The  exclusion of the dividends in the
calculation does not have any effect on total stockholders' equity.

The net assets of NFPM ($629,999)  primarily  consisted of accounts  receivable,
property and equipment, accounts payable and accrued liabilities,  notes payable
and accrued interest.  Results of operations included in discontinued operations
are as follows for the six months ended June 30:

                                                            2002         2001
                                                         ----------   ----------
Revenue                                                  $  740,619   $1,230,554
Operating Costs                                             509,223      876,883
                                                         ----------   ----------
Net Income                                                  231,396      353,671
Income tax provision                                         78,676      120,248
                                                         ----------   ----------
Income from discontinued
operations                                               $  152,720   $  233,423
                                                         ==========   ==========

NOTE 4: REINCORPORATION AND REVERSE STOCK SPLIT

Effective  June 13,  2002,  the  Company  reincorporated  in the  State of Texas
through a merger of the Company with a newly formed wholly-owned subsidiary.  At
the effective date of the merger each share of the company's  outstanding common
stock was converted into one share of the reincorporated  company's common stock
and all  options to  purchase  share of our common  stock  were  converted  into
options to purchase shares of the reincorporated common stock at the time of the
merger.  All of  the  company's  officers  and  directors  became  officers  and
directors of the reincorporated  company after the merger.  The  reincorporation
was approved at the Company's  Annual Meeting of  Shareholders  held on February
11, 2002.

Effective  June 24, 2002,  the Company  effected a one-for-one  hundred  reverse
stock split and amended the  Company's  Article of  Incorporation  to reduce the
number of  authorized  shares of our  Common  Stock from  150,000,000  shares to
20,000,000  shares,  and increased the number of authorized  shares of preferred
stock from 1, 000,000 shares to 5,000,000 shares (the "Amendment").  The reverse
stock  split and  Amendment  were  approved by the Board of  Directors  and by a
majority of the Company's shareholders on June 21, 2002.

NOTE 5: SUBSEQUENT EVENTS - DIVESTURE OF ASSETS

Effective  August 1, 2002, the Company sold its ninety-nine  percent interest in
e-Appliance Innovations, LLC, a Nevada limited liability company, to e-Appliance
Payment   Solutions,   LLC,  a  Nevada  limited   liability   company  ("Payment
Solutions"),   in  exchange  for  the   assumption   by  Payment   Solutions  of
substantially all the Company's liabilities. E-Appliance Innovations constituted
substantially  all of the assets of the Company,  and held all of the  Company's
rights to the  Company's  proprietary  technology  designed  to enable  Internet


                                       5
<PAGE>

transaction  devices (ITDs) to be used as transaction  processing devices in the
field and the software programs implementing this technology that were developed
or acquired by the Company (the  "Technology").  In  connection  with this sale,
Payment  Solutions  granted the Company a world-wide,  royalty-free,  perpetual,
non-exclusive license to use the Technology to develop, market, sell and operate
electronic client services to be made available to clients through the Company's
computer network.  The transaction  resulted in a decrease in liabilities and an
increase in total stockholders' equity of approximately $2,247,000. (See Note 6)

NOTE 6:  RELATED PARTIES

Effective  August 1, 2002, the Company sold  substantially  all of its assets to
Payment  Solutions,  in exchange  for the  assumption  by Payment  Solutions  of
substantially  all of  the  Company's  liabilities.  Mr.  Scott  A.  Haire,  the
Company's  President  and Chief  Executive  Officer  directly  owns 0.5%, of the
membership interests in Payment Solutions, and beneficially may be deemed to own
an additional  57.8% through HEB LLC and SAH, LLC. Mr. Haire is also the Manager
of Payment Solutions.

Mr. Gilbert  Valdez,  and Mr. Araldo  Cossutta,  each a director of the Company,
directly  own 0.5%,  and 16.44%,  respectively,  of the  membership  interest in
Payment Solutions.  Mr. Cossutta may be deemed to beneficially own an additional
8.38%  of the  membership  interests  of  Payment  Solutions  thorough  Patricia
Cossutta, his wife.

Mr.  Richard F. Dahlson,  a partner with the law firm of Jackson  Walker L.L.P.,
the Company's  chief legal  counsel,  owns 7.51% of the  membership  interest in
Payment Solutions.

























                                       6
<PAGE>

ITEM 2:  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

Caution Concerning Forward-Looking Statements/Risk Factors
- ----------------------------------------------------------

The  following  discussion  should  be read in  conjunction  with the  Company's
financial  statements and the notes thereto and the other financial  information
appearing elsewhere in this document. In addition to historical information, the
following   discussion  and  other  parts  of  this  document   contain  certain
forward-looking information. When used in this discussion, the words "believes,"
"anticipates,"  "expects,"  and  similar  expressions  are  intended to identify
forward-looking  statements.  Such  statements  are subject to certain risks and
uncertainties,  which could cause actual results to differ materially from those
projected  due to a number of factors  beyond our control.  The Company does not
undertake  to publicly  update or revise any of its  forward-looking  statements
even if experience or future  changes show that the indicated  results or events
will not be realized.  You are  cautioned  not to place undue  reliance on these
forward-looking statements, which speak only as of the date hereof. You are also
urged to carefully  review and consider our  discussions  regarding  the various
factors,  which affect our  business,  included in this section and elsewhere in
this report.

Factors that might cause actual  results,  performance or achievements to differ
materially  from those projected or implied in such  forward-looking  statements
include,  among  other  things:  (i) the impact of  competitive  products;  (ii)
changes in law and  regulations;  (iii) adequacy and  availability  of insurance
coverage;  (iv)  limitations on future  financing;  (v) increases in the cost of
borrowings  and  unavailability  of debt or equity  capital;  (vi) the effect of
adverse publicity regarding our products;  (vii) the inability of the Company to
gain and/or hold market share;  (viii)  exposure to and expense of resolving and
defending  product   liability  claims  and  other  litigation;   (ix)  consumer
acceptance of the Company's products;  (x) managing and maintaining growth; (xi)
customer  demands;  (xii) market and industry  conditions  including pricing and
demand for products,  (xiii) the success of product  development and new product
introductions  into the  marketplace;  (xiv) the  departure  of key  members  of
management;  (xv) the ability of the Company to efficiently market its products;
as well as other risks and uncertainties that are described from time to time in
the Company's filings with the Securities and Exchange Commission.

General
- -------

In July of 2001, the Company acquired certain proprietary technology designed to
enable Internet transaction devices (ITDs) to be used as transaction  processing
devices in the field.  The Company  acquired  these  technology  assets with the
intent to provide transaction services to physicians' practices.

Effective May 8, 2002 in accordance  with the terms of the previously  announced
Restructure  and  Settlement  Agreement  dated  as  of  November  5,  2001  (the
"Restructure  and  Settlement   Agreement"),   among  the  Company,   Healthcare
Innovations,  LLC,  Imagine  Investments,  Inc.  ("Imagine")  and  XHI(2),  Inc.
("XHI(2)"),  the Company  completed the sale of its medical clinics  business to
XHI(2). In exchange for the sale, Imagine and XHI(2) surrendered to the Company,
the Company's  promissory  notes in the aggregate  principal amount of $800,000,
plus all  interest  due  thereunder,  and all shares of the  Company's  Series A
Preferred Stock (340,000 shares in the aggregate) held by Imagine and XHI(2). In
addition to receiving the Company's medical clinic business,  Imagine and XHI(2)
also received an aggregate of 4,500,000  shares of the  Company's  common stock.
The Settlement and  Restructure  Agreement was approved at the Company's  Annual
Meeting of Shareholders held on February 11, 2002.  Therefore,  the statement of
operations reflects the unaudited results of discontinued operations.

In the second  quarter of 2002,  the Company  shifted  business  strategies  and
focused on a  restructuring  strategy to  maximize  shareholder  value.  The new
strategy  is  intended  to  maximize  shareholder  value by  seeking  attractive
operating  companies for acquisition.  The Company intends to evaluate companies
that would benefit from access to public  markets.  The Company did not have any
business  operations  during  the  second  quarter  of 2002,  other  than  those
associated  with the  execution  of this  new  strategy  and  with a short  term
agreement to act as an  administration  agent for the clinics  business  sold to
Imagine and XHI(2).




                                       7
<PAGE>

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

As of June 30, 2002, we did not have any significant assets.

Our future funding  requirements will depend on numerous factors,  some of which
are beyond the Company's  control.  These factors include our ability to operate
profitably,  recruit and train  management  and  personnel,  and to compete with
other, better-capitalized and more established competitors.

We believe  that the Company can  satisfy  its cash  requirements  over the next
twelve  months by  advances  from  shareholders  and/or  through  debt or equity
offerings  and private  placements in order to expand the range and scope of our
business  operations.  There is no assurance that such additional  funds will be
available for the Company to finance its operations on acceptable  terms,  if at
all.  Furthermore,  there is no assurance the net proceeds  from any  successful
financing  arrangement will be sufficient to cover cash requirements  during the
initial stages of the Company's operations, once a suitable business opportunity
has been identified. Due to the "start up" nature of the Company's business, the
Company expects to incur losses as it expands.

Our ability to meet future cash  requirements  is dependent upon the our ability
to successfully  obtain external financing and to generate revenues.  We operate
in an  intensely  competitive  industry  and many of our  competitors  have much
greater resources.  There can be no assurance that any of the Company's business
activities will result in any operating revenues or profits. Investors should be
aware that they might lose all or substantially all of their investment.

The  continued  existence of the Company is  dependent  upon our ability to meet
future  financing  requirements  and the  success  of future  operations.  These
factors raise  substantial  doubt about the  Company's  ability to continue as a
going concern.  We believe that actions  presently taken to revise the Company's
operating and financial  requirements provide the opportunity for the Company to
continue as a going concern.  Our ability to achieve these objectives  cannot be
determined at this time.

The Company does not anticipate  incurring  significant research and development
costs,  the purchase of any major equipment,  or any significant  changes in the
number of its employees over the next twelve months.

Recent Accounting Pronouncements
- --------------------------------

The  Financial  Accounting  Standards  Board  ("FASB") has issued the  following
pronouncements,  none of which are expected to have a significant  affect on the
financial statements:

April 2002 - SFAS No. 145,  "Rescission  of FASB  Statements  No. 4, 44, and 64,
Amendment of FASB Statement No. 13, and Technical  Corrections."  Under SFAS No.
4, all  gains  and  losses  from  extinguishment  of debt  were  required  to be
aggregated and, if material, classified as an extraordinary item, net of related
income tax effect. This Statement eliminates SFAS No. 4 and, thus, the exception
to applying  APB No. 30 to all gains and losses  related to  extinguishments  of
debt.  As a result,  gains and  losses  from  extinguishment  of debt  should be
classified as extraordinary  items only if they meet the criteria in APB No. 30.
Applying the  provisions of APB No. 30 will  distinguish  transactions  that are
part of an  entity's  recurring  operations  from  those  that  are  unusual  or
infrequent  or that meet the criteria  for  classification  as an  extraordinary
item.  Under SFAS No. 13, the required  accounting  treatment  of certain  lease
modifications that have economic effects similar to sale-leaseback  transactions
was  inconsistent  with the required  accounting  treatment  for  sale-leaseback
transactions.  This  Statement  amends  SFAS No. 13 to require  that those lease
modifications   be   accounted   for  in  the  same  manner  as   sale-leaseback
transactions.  This  statement  also makes  technical  corrections  to  existing
pronouncements.  While those  corrections are not substantive in nature, in some
instances, they may change accounting practice.



                                       8
<PAGE>

June 2002 - SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal
Activities."  This Statement  addresses  financial  accounting and reporting for
costs associated with exit or disposal  activities and nullifies Emerging Issues
Task Force (EITF) Issue 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  principal  difference  between this
Statement  and EITF  94-3  relates  to its  requirements  for  recognition  of a
liability  for a cost  associated  with  an  exit  or  disposal  activity.  This
Statement  requires  that a  liability  for a cost  associated  with  an exit or
disposal activity be recognized when the liability is incurred. Under EITF 94-3,
a liability  was  recognized  at the date of an entity's  commitment  to an exit
plan.  This  Statement is  effective  for exit or disposal  activities  that are
initiated after December 31, 2002.

October 2002 - SFAS No. 147, "Acquisitions of Certain Financial Institutions, an
amendment  of FASB  Statements  No. 72 and 144 and FASB  Interpretation  No. 9,"
which  applies to the  acquisition  of all or part of a  financial  institution,
except for a transaction  between two or more mutual  enterprises.  SFAS No. 147
removes  the  requirement  in SFAS  No.  72 and  Interpretation  9  thereto,  to
recognize and amortize any excess of the fair value of liabilities  assumed over
the fair value of tangible and  identifiable  intangible  assets  acquired as an
un-identifiable   intangible   asset.   This   statement   requires  that  those
transactions  be  accounted  for in  accordance  with  SFAS No.  141,  "Business
Combinations,"  and SFAS No. 142,  "Goodwill  and Other  Intangible  Assets." In
addition,  this statement amends SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets," to include certain financial institution-related
intangible  assets.  This statement is effective for  acquisitions for which the
date of acquisition is on or after October 1, 2002, and is not applicable to the
Company.

November 2002 - FASB issued FASB Interpretation No. 45 ("FIN 45"),  "Guarantor's
Accounting  and  Disclosure  Requirements  for  Guarantees,  Including  Indirect
Guarantees  of  Indebtedness  of Others."  FIN 45 requires  that a liability  be
recorded in the  guarantor's  balance  sheet upon  issuance of a  guarantee.  In
addition,  FIN 45 requires  disclosures  about the guarantees that an entity has
issued,  including a roll-forward of the entity's product warranty  liabilities.
Initial  recognition  and  measurement  provisions  of  the  Interpretation  are
applicable  on a  prospective  basis to  guarantees  issued  or  modified  after
December 31, 2002.  The  disclosure  requirements  are  effective  for financial
statements of interim or annual periods ending after December 15, 2002.

December    2002   -   SFAS   No.    148,    "Accounting    for   Stock    Based
Compensation-Transition  and  Disclosure."  This statement was issued to provide
alternative methods of transition for a voluntary change to the fair value based
method of accounting for stock-based employee  compensation.  In addition,  this
Statement  amends  the  disclosure  requirements  of  Statement  123 to  require
prominent  disclosures in both annual and interim financial statements about the
method of accounting for stock-based employee compensation and the effect of the
method used on reported  results.  This  statement  is effective  for  financial
statements for fiscal years ending after December 15, 2002.  This statement does
not  have  any  impact  on the  Company  because  the  Company  does not plan to
implement the fair value method.

January 2003 - FASB issued FASB Interpretation No. 46 ("FIN 46"), "Consolidation
of Variable Interest Entities, an Interpretation of ARB No. 51." FIN 46 requires
certain variable interest entities to be consolidated by the primary beneficiary
of  the  entity  if  the  equity  investors  in  the  entity  do  not  have  the
characteristics  of a controlling  financial  interest or do not have sufficient
equity at risk for the  entity to  finance  its  activities  without  additional
subordinated  financial support from other parties.  FIN 46 is effective for all
new variable  interest  entities created or acquired after January 31, 2003. For
variable  interest  entities  created or acquired prior to February 1, 2003, the
provisions  of FIN 46 must be applied  for the first  interim  or annual  period
beginning after June 15, 2003.

April  2003 - SFAS No.  149,  "Accounting  for  Amendment  of  Statement  133 on
Derivative  Instruments  and Hedging  Activities,"  which  amends and  clarifies
financial accounting and reporting for derivative instruments, including certain


                                       9
<PAGE>

derivative  instruments  embedded in other contracts and for hedging  activities
under FASB Statement No. 133, Accounting for Derivative  Instruments and Hedging
Activities.  This Statement is generally effective for contracts entered into or
modified   after  June  30,  2003,   and  all   provisions   should  be  applied
prospectively. This statement does not affect the Company.

May 2003 - SFAS No. 150,  "Accounting  for Certain  Financial  Instruments  with
Characteristics of both Liabilities and Equity," which establishes standards for
how an  issuer  classifies  and  measures  certain  financial  instruments  with
characteristics  of both  liabilities  and equity.  It  requires  that an issuer
classify a financial  instrument  that is within its scope as a liability (or an
asset  in  some  circumstances).  This  Statement  is  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  principle for financial  instruments  created before the issuance
date of the Statement and still  existing at the beginning of the interim period
of adoption.  Restatement is not  permitted.  This statement does not affect the
Company.

Pending accounting pronouncements - It is anticipated current pending accounting
pronouncements  will not have an adverse  impact on the financial  statements of
the Company.

ITEM 3.  CONTROLS AND PROCEDURES

The President,  who is also the chief executive  officer and the chief financial
officer of the  Company,  has  concluded  based on his  evaluation  as of a date
within  90 days  prior  to the  date of the  filing  of this  Report,  that  the
Company's  disclosure  controls  and  procedures  are  effective  to ensure that
information  required to be  disclosed  by the  Company in the reports  filed or
submitted  by it under the  Securities  Act of 1934,  as amended,  is  recorded,
processed,  summarized  and reported  within the time  periods  specified in the
Securities and Exchange  Commission's  rules and forms, and include controls and
procedures  designed to ensure that information  required to be disclosed by the
Company in such reports is  accumulated  and  communicated  to the  Registrant's
management,  including the president,  as appropriate to allow timely  decisions
regarding required disclosure.

There were no significant changes in the Company's internal controls or in other
factors that could significantly affect these controls subsequent to the date of
such evaluation.

PART II  - OTHER INFORMATION

ITEM 2. CHANGES IN SECURITIES

Effective May 8, 2002 in accordance  with the terms of the previously  announced
Restructure  and  Settlement  Agreement  dated  as  of  November  5,  2001  (the
"Restructure  and  Settlement   Agreement"),   among  the  Company,   Healthcare
Innovations,  LLC,  Imagine  Investments,  Inc.  ("Imagine")  and  XHI(2),  Inc.
("XHI(2)"),  the Company  completed the sale of its medical clinics  business to
XHI(2). In exchange for the sale, Imagine and XHI(2) surrendered to the Company,
the Company's  promissory  notes in the aggregate  principal amount of $800,000,
plus all  interest  due  thereunder,  and all shares of the  Company's  Series A
Preferred Stock (340,000 shares in the aggregate) held by Imagine and XHI(2). In
addition to receiving the Company's medical clinic business,  Imagine and XHI(2)
also received an aggregate of 4,500,000  shares of the  Company's  common stock.
The Settlement and  Restructure  Agreement was approved at the Company's  Annual
Meeting of Shareholders held on February 11, 2002. The issuance of the Company's
common  stock  described  above was made in reliance  upon the  exemptions  from
registration  requirements  of the  Securities  Act of  1933,  as  amended  (the
"Securities Act"),  contained in Section 4(2) on the basis that such transaction
did not involve a public offering.  The certificates  evidencing the shares bear
legends  stating that the securities are not to be offered,  sold or transferred
other than pursuant to an effective  registration statement under the Securities
Act or an exemption from such registration requirements.

On June 17, 2002, the Company issued 4,600,000 shares of its common stock to Mr.
Mark Wilson for consulting  services rendered in connection with the Restructure
and Settlement Agreement.  The shares of common stock were issued at fair market


                                       10
<PAGE>

value at the time of issuance. The issuance of these shares was made in reliance
upon  the  exceptions  from  registration  requirement  of  the  Securities  Act
contained  in Section 4 (2) on the basis that such  issuance  did not  involve a
public  offering.  Immediately  after  receiving  the shares,  Mr. Wilson gifted
1,000,000 of these shares to Della Wilson, Mr. Wilson's wife.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

On  June  21,  2002,  the  Company   received  the  approval  of  the  Company's
shareholders  for a one for one hundred  reverse stock split.  This approval was
obtained by the written consent of shareholders holding 42,028,101 shares of the
Company's  common stock,  which number  represented a majority of the issued and
outstanding  shares of the Company's  common stock at that time. No shareholders
of the Company  were  requested to provide the Company with a proxy or vote with
respect  to this  matter  and,  therefore,  no  shareholders  voted  against  or
abstained from voting for this matter.

ITEM 6.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES
         AND REPORTS ON FORM 8-K

(a) Exhibits

     3.1  Articles of Incorporation*
     3.2  Bylaws*
     10.1 Restructure  and Settlement  Agreement dated as of November 5, 2001 by
          and  among  MB  Software  Corporation,  Healthcare  Innovations,  LLC,
          Imagine Investments, Inc., and XHI(2), Inc. (incorporated by reference
          to the Company's  Form 10-QSB for the fiscal  quarter ended  September
          30, 2001)
     31.1 Certification of Principal  Executive Officer and Principal  Financial
          Officer  in  accordance  with 18 U.S.C.  Section  1350,  as adopted by
          Section 302 of the Sarbanes-Oxley Act of 2002*
     32.1 Certification of Principal  Executive Officer and Principal  Financial
          Officer  in  accordance  with 18 U.S.C.  Section  1350,  as adopted by
          Section 906 of the Sarbanes-Oxley Act of 2002*
- ---------
*  Filed herewith

(b) Reports on Form 8-K

     The Company  filed no reports on Form 8-K during the quarter ended June 30,
     2002.






                                       11
<PAGE>

                                   SIGNATURES

In accordance  with the  requirements  of the Exchange Act, the  registrant  has
caused this report to be signed on its behalf by the undersigned  thereunto duly
authorized.

                                         MB SOFTWARE CORPORATION



Date: Aug. 12, 2003                       /s/ Scott A. Haire
                                         ---------------------------------------
                                         Scott A.  Haire, Chairman of the Board,
                                         Chief Executive Officer and President
                                         (Principal Financial Officer)






























                                       12
<PAGE>

                                Index of Exhibits



3.1  Articles of Incorporation*

3.2  Bylaws*

10.1 Restructure  and Settlement  Agreement  dated as of November 5, 2001 by and
     among  MB  Software  Corporation,   Healthcare  Innovations,  LLC,  Imagine
     Investments,  Inc.,  and XHI(2),  Inc.  (incorporated  by  reference to the
     Company's Form 10-QSB for the fiscal quarter ended September 30, 2001)

31.1 Certification  of  Principal  Executive  Officer  and  Principal  Financial
     Officer in  accordance  with 18 U.S.C.  Section 1350, as adopted by Section
     302 of the Sarbanes-Oxley Act of 2002*

32.1 Certification  of  Principal  Executive  Officer  and  Principal  Financial
     Officer in  accordance  with 18 U.S.C.  Section 1350, as adopted by Section
     906 of the Sarbanes-Oxley Act of 2002*
- ---------

* Filed herewith
























                                       13









</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.1
<SEQUENCE>3
<FILENAME>mb10qsbex31063002.txt
<DESCRIPTION>ARTICLES OF INCORPORATION
<TEXT>


EXHIBIT 3.1

                            ARTICLES OF INCORPORATION
                                       OF
                          eAPPLIANCE INNOVATIONS, INC.

     The  undersigned  natural  person,  of the age of eighteen years or more, a
resident of the State of Texas, acting as an incorporator of a corporation under
the Texas Business  Corporation Act, does hereby adopt the following Articles of
Incorporation for such corporation:


                                   ARTICLE ONE

     The name of the Corporation is "eAppliance Innovations, Inc."


                                   ARTICLE TWO

     The Corporation will have perpetual existence.


                                  ARTICLE THREE

     The purpose for which the  Corporation  is organized is the  transaction of
any or all lawful business for which  corporations may be incorporated under the
Texas Business Corporation Act.


                                  ARTICLE FOUR

     The aggregate  number of shares of capital stock that the Corporation  will
have authority to issue is one hundred and fifty-one million (151,000,000),  one
hundred and fifty million (150,000,000) of which will be shares of Common Stock,
having a par value of $.001 per share, and one million (1,000,000) of which will
be shares of preferred stock, having a par value of $10 per share.

     Preferred  stock may be issued in one or more  series as may be  determined
from time to time by the Board of  Directors.  All  shares of any one  series of
preferred  stock will be identical  except as to the date of issue and the dates
from which  dividends  on shares of the series  issued on  different  dates will
cumulate,  if cumulative.  Authority is hereby expressly granted to the Board of
Directors  to authorize  the issuance of one or more series of preferred  stock,
and to fix by  resolution  or  resolutions  providing for the issue of each such
series   the   voting   powers,   designations,   preferences,   and   relative,
participating,  optional,  redemption,  conversion,  exchange  or other  special
rights,  qualifications,  limitations or  restrictions  of such series,  and the
number of shares in each series,  to the full extent now or hereafter  permitted
by law.


                                  ARTICLE FIVE

     No shareholder of the Corporation  will, solely by reason of holding shares
of any class, have any preemptive or preferential right to purchase or subscribe
for any shares of the  Corporation,  now or hereafter to be  authorized,  or any
notes,  debentures,  bonds  or other  securities  convertible  into or  carrying
warrants, rights or options to purchase shares of any class, now or hereafter to
be  authorized,  whether or not the  issuance  of any such shares or such notes,


                                       1
<PAGE>


debentures,  bonds or other  securities  would  adversely  affect the  dividend,
voting  or any other  rights of such  shareholder.  The Board of  Directors  may
authorize the issuance of, and the Corporation may issue, shares of any class of
the Corporation, or any notes, debentures, bonds or other securities convertible
into or  carrying  warrants,  rights or options  to  purchase  any such  shares,
without offering any shares of any class to the existing holders of any class of
stock of the Corporation.


                                   ARTICLE SIX

     Shareholders  of the  Corporation  will not have  the  right of  cumulative
voting for the election of directors.


                                  ARTICLE SEVEN

     Any action that under the provisions of the Texas Business  Corporation Act
would,  but  for  this  Article  Seven,  be  required  to be  authorized  by the
affirmative  vote of the holders of any  specified  portion of the shares of the
Corporation will require the approval of the holders of a majority of the shares
of the Corporation entitled to vote on the action.


                                  ARTICLE EIGHT

     Pursuant  to  Article  13.04 of the Texas  Business  Corporation  Act,  the
Corporation elects not to be governed by Article 13.03, the Business Combination
Law, of the Texas Business Corporation Act.


                                  ARTICLE NINE

     Any action required or permitted by law, these Articles of Incorporation or
the Bylaws of the  Corporation to be taken at a meeting of the  shareholders  of
the Corporation may be taken without a meeting, without prior notice and without
a vote, if a consent or consents in writing,  setting forth the action so taken,
shall have been  signed by the holder or holders of shares  having not less than
the  minimum  number of votes that would be  necessary  to take such action at a
meeting at which the  holders of all shares  entitled to vote on the action were
present and voted.

     Prompt notice of the taking of any action by shareholders without a meeting
by less than unanimous written consent shall be given to those  shareholders who
did not consent in writing to the action.


                                   ARTICLE TEN

     The Board of Directors is expressly  authorized  to alter,  amend or repeal
the Bylaws of the Corporation or to adopt new Bylaws.


                                 ARTICLE ELEVEN

     (a) The  Corporation  will,  to the  fullest  extent  permitted  by, and in
accordance  with the Texas Business  Corporation  Act, as the same exists or may
hereafter be amended,  indemnify  any and all persons who are or were serving as
director  or  officer  of the  Corporation,  or who are or were  serving  at the
request  of  the  Corporation  as  a  director,   officer,  partner,   venturer,
proprietor,  trustee or employee of another  corporation,  partnership,  limited
liability company,  joint venture, sole proprietorship,  trust, employee benefit


                                       2
<PAGE>

plan or  other  enterprise,  from  and  against  any  and  all of the  expenses,
liabilities  or other  matters  referred to in or covered by the Texas  Business
Corporation  Act. Such  indemnification  may be provided  pursuant to any Bylaw,
agreement, vote of shareholders or disinterested directors or otherwise, both as
to action in the  capacity  of  director  or officer and as to action in another
capacity while holding such office,  will continue as to a person who has ceased
to be a director or officer and inure to the benefit of the heirs, executors and
administrators of such a person.

     (b) If a claim under  paragraph  (a) of this Article is not paid in full by
the  Corporation  within 30 days after a written  claim has been received by the
Corporation,  the  claimant  may at any time  thereafter  bring suit against the
Corporation  to recover  the unpaid  amount of the claim and, if  successful  in
whole or in part,  the claimant  will be entitled to be paid also the expense of
prosecuting  such claim.  It will be a defense to any such action (other than an
action  brought  to  enforce a claim for  expenses  incurred  in  defending  any
proceeding in advance of its final disposition  where the required  undertaking,
if any is required,  has been tendered to the Corporation) that the claimant has
not met the standards of conduct that make it permissible  under the laws of the
State of Texas for the  Corporation  to  indemnify  the  claimant for the amount
claimed,  but the burden of proving  such  defense  will be on the  Corporation.
Neither  the  failure  of the  Corporation  (including  its Board of  Directors,
independent  legal counsel,  or its  shareholders)  to have made a determination
prior to the commencement of such action that indemnification of the claimant is
proper  in the  circumstances  because  he has met the  applicable  standard  of
conduct set forth in the laws of the State of Texas nor an actual  determination
by the Corporation (including its Board of Directors, independent legal counsel,
or its shareholders)  that the claimant has not met such applicable  standard of
conduct,  will be a  defense  to the  action or  create a  presumption  that the
claimant has not met the applicable standard of conduct.


                                 ARTICLE TWELVE

     To the fullest  extent  permitted  by the laws of the State of Texas as the
same exist or may hereafter be amended,  a director of the Corporation  will not
be liable to the Corporation or its shareholders for monetary damages for an act
or omission in the director's capacity as a director. Any repeal or modification
of this Article will not increase the personal  liability of any director of the
Corporation  for any act or  occurrence  taking  place  before  such  repeal  or
modification,  or adversely  affect any right or protection of a director of the
Corporation existing at the time of such repeal or modification.  The provisions
of this Article  shall not be deemed to limit or preclude  indemnification  of a
director by the  Corporation  for any  liability of a director that has not been
eliminated by the provisions of this Article.


                                ARTICLE THIRTEEN

     The  Corporation  will not commence  business until it has received for the
issuance of shares consideration of the value of at least $1,000.


                                ARTICLE FOURTEEN

     The street address of the Corporation's  initial  registered office is 2225
E. Randol Mill Road,  Suite 305,  Arlington,  Texas  76011,  and the name of its
initial  registered agent at that address is Scott A. Haire, 2225 E. Randol Mill
Road, Suite 305, Arlington, Texas 76011.



                                       3
<PAGE>

                                 ARTICLE FIFTEEN

     The  number  of  directors  constituting  the  Board  of  Directors  of the
Corporation,  which  shall be composed of not less than one nor more than eight,
shall  initially  be one (1) and the name and mailing  addresses of such person,
who is to serve as a director until the first annual meeting of the shareholders
or until his successors are elected and qualified, is:

                                 Scott A. Haire
                       2225 E. Randol Mill Road, Suite 305
                             Arlington, Texas 76011


     Hereafter,  the number of directors  will be determined in accordance  with
the Bylaws of the Corporation.


                                 ARTICLE SIXTEEN

     The name and address of the incorporator are:

                               Robert J. Johnston
                           901 Main Street, Suite 6000
                               Dallas, Texas 75202

     EXECUTED as of the 14th day of December, 2001.



                                                     By:________________________
                                                        Robert J. Johnston
                                                        Incorporator
















                                       4


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.2
<SEQUENCE>4
<FILENAME>mb10qsbex32063002.txt
<DESCRIPTION>BYLAWS OF EAPPLIANCE INNOVATIONS, INC.
<TEXT>
















                                     BYLAWS

                                       OF

                          eAPPLICANE INNOVATIONS, INC.


<PAGE>

                                TABLE OF CONTENTS

ARTICLE I......................................................................1
   OFFICES.....................................................................1
      Section 1.1 Registered Office............................................1
      Section 1.2 Other Offices................................................1
ARTICLE II.....................................................................1
   SHAREHOLDERS................................................................1
      Section 2.1 Place of Meetings............................................1
      Section 2.2 Annual Meeting...............................................1
      Section 2.3 List of Shareholders.........................................1
      Section 2.4 Special Meetings.............................................2
      Section 2.5 Notice.......................................................2
      Section 2.6 Quorum.......................................................2
      Section 2.7 Voting.......................................................2
      Section 2.8 Method of Voting.............................................2
      Section 2.9 Record Date; Closing Transfer Books..........................3
      Section 2.10   Action by Consent.........................................3
ARTICLE III....................................................................3
   BOARD OF DIRECTORS..........................................................3
      Section 3.1 Management...................................................3
      Section 3.2 Qualification; Election; Term................................3
      Section 3.3 Number.......................................................3
      Section 3.4 Removal......................................................4
      Section 3.5 Vacancies....................................................4
      Section 3.6 Place of Meetings............................................4
      Section 3.7 Annual Meeting...............................................4
      Section 3.8 Regular Meetings.............................................4
      Section 3.9 Special Meetings.............................................4
      Section 3.10   Quorum....................................................4
      Section 3.11   Interested Directors......................................4
      Section 3.12   Committees................................................5
      Section 3.13   Action by Consent.........................................5
      Section 3.14   Compensation of Directors.................................5
      Section 3.15   Organization..............................................5
ARTICLE IV.....................................................................5
   NOTICE......................................................................5
      Section 4.1 Form of Notice...............................................5
      Section 4.2 Waiver.......................................................6
ARTICLE V......................................................................6
   OFFICERS AND AGENTS.........................................................6
      Section 5.1 In General...................................................6
      Section 5.2 Election.....................................................6
      Section 5.3 Other Officers and Agents....................................6
      Section 5.4 Compensation.................................................6
      Section 5.5 Term of Office and Removal...................................6
      Section 5.6 Employment and Other Contracts...............................7


                                       i


<PAGE>

      Section 5.7 Chairman of the Board of Directors...........................7
      Section 5.8 President....................................................7
      Section 5.9 Vice Presidents..............................................7
      Section 5.10   Secretary.................................................7
      Section 5.11   Assistant Secretaries.....................................7
      Section 5.12   Treasurer.................................................8
      Section 5.13   Assistant Treasurers......................................8
      Section 5.14   Bonding...................................................8
ARTICLE VI.....................................................................8
   CERTIFICATES REPRESENTING SHARES............................................8
      Section 6.1 Form of Certificates.........................................8
      Section 6.2 Lost Certificates............................................8
      Section 6.3 Transfer of Shares...........................................9
      Section 6.4 Transfer Agent...............................................9
      Section 6.5 Registered Shareholders......................................9
ARTICLE VII...................................................................10
   GENERAL PROVISIONS.........................................................10
      Section 7.1 Dividends...................................................10
      Section 7.2 Reserves....................................................10
      Section 7.3 Telephone and Similar Meetings..............................10
      Section 7.4 Books and Records...........................................10
      Section 7.5 Fiscal Year.................................................10
      Section 7.6 Seal. 10
      Section 7.7 Indemnification.............................................11
      Section 7.8 Insurance...................................................11
      Section 7.9 Resignation.................................................11
      Section 7.10   Amendment of Bylaws......................................11
      Section 7.11   Invalid Provisions.......................................11
      Section 7.12   Relation to Articles of Incorporation....................11
















                                       ii

<PAGE>

                                     BYLAWS
                                       OF
                          eAPPLIANCE INNOVATIONS, INC.


                                    ARTICLE I

                                     OFFICES

     Section 1.1 Registered  Office.  The registered office and registered agent
of  2225  E.  Randol  Mill  Road,  Suite  305,   Arlington,   Texas  76011  (the
"Corporation")  will be as from  time to time  set  forth  in the  Corporation's
Articles of  Incorporation  or in any  certificate  filed with the  Secretary of
State of the State of Texas to amend such information.

     Section 1.2 Other Offices.  The  Corporation  may also have offices at such
other  places,  both  within  and  without  the State of Texas,  as the Board of
Directors may from time to time determine or the business of the Corporation may
require.

                                   ARTICLE II

                                  SHAREHOLDERS

     Section 2.1 Place of  Meetings.  All meetings of the  shareholders  for the
election of Directors will be held at the principal office of the Corporation or
at such place,  within or without the State of Texas,  as may be fixed from time
to time by the  Board of  Directors.  Meetings  of  shareholders  for any  other
purpose  may be held at such  time and  place,  within or  without  the State of
Texas,  as may be stated  in the  notice of the  meeting  or in a duly  executed
waiver of notice thereof.

     Section 2.2 Annual Meeting.  An annual meeting of the shareholders  will be
held at such  time as may be  determined  by the  Board of  Directors,  at which
meeting the shareholders will elect a Board of Directors and transact such other
business as may properly be brought before the meeting.

     Section  2.3 List of  Shareholders.  At least  ten (10)  days  before  each
meeting of shareholders, a complete list of the shareholders entitled to vote at
such meeting, arranged in alphabetical order, with the address of and the number
of voting shares registered in the name of each, will be prepared by the officer
or agent having charge of the stock transfer books.  Only shareholders of record
on the  books  of  the  Corporation  shall  be  entitled  to be  treated  by the
Corporation as holders in fact of the shares standing in their respective names,
and the Corporation shall not be bound to recognize any equitable or other claim
to,  or  interest  in,  any  shares  on the part of any  other  person,  firm or
Corporation, whether o not it shall have express or other notice thereof, except
as  expressly   provided  by  the  laws  of  the  state  of  the   Corporation's
incorporation.  Such list will be kept on file at the  registered  office of the
Corporation  for a period of ten (10)  days  prior to such  meeting  and will be
subject to  inspection  by any  shareholder  at any time during  usual  business
hours.  Such  list will be  produced  and kept open at the time and place of the
meeting during the whole time thereof,  and will be subject to the inspection of
any shareholder  who may be present.  The original stock transfer books shall be
prima  facie  evidence  as to who are the  shareholders  entitled to examine the
record or transfer books or to vote at any meeting of shareholders.


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     Section 2.4 Special Meetings. Special meetings of the shareholders, for any
purpose or  purposes,  unless  otherwise  prescribed  by law,  the  Articles  of
Incorporation  or these Bylaws,  may be called by the Chairman of the Board, the
President  or the Board of  Directors,  or will be called by the  holders of not
less than ten percent (10%) of all the shares issued,  outstanding  and entitled
to vote.  Such  request  will state the  purpose  or  purposes  of the  proposed
meeting.  Business  transacted  at all special  meetings will be confined to the
purposes stated in the notice of the meeting unless all shareholders entitled to
vote are present and consent.

     Section 2.5 Notice.  Written or printed notice  stating the place,  day and
hour of any meeting of the shareholders  and, in case of a special meeting,  the
purpose or purposes for which the meeting is called,  will be delivered not less
than ten (10) nor more than  sixty  (60) days  before  the date of the  meeting,
either  personally  or by mail,  by or at the  direction of the  President,  the
Secretary,  or the officer or person calling the meeting, to each shareholder of
record entitled to vote at the meeting. If mailed, such notice will be deemed to
be  delivered  when  deposited  in the  United  States  mail,  addressed  to the
shareholder  at his  address as it appears  on the stock  transfer  books of the
Corporation, with postage thereon prepaid.

     Section 2.6 Quorum.  With respect to any matter,  the presence in person or
by proxy of the  holders of a majority  of the shares  entitled  to vote on that
matter  will  be  necessary  and  sufficient  to  constitute  a  quorum  for the
transaction of business  except as otherwise  provided by law, or these Articles
of Incorporation.  If, however, such quorum is not present or represented at any
meeting of the shareholders,  the shareholders entitled to vote thereat, present
in person or represented  by proxy,  will have power to adjourn the meeting from
time to time,  without notice other than  announcement  at the meeting,  until a
quorum is present or  represented.  If the  adjournment  is for more than thirty
(30)  days,  or if after  the  adjournment  a new  record  date is fixed for the
adjourned  meeting,  a notice  of the  adjourned  meeting  will be given to each
shareholder of record entitled to vote at the meeting. At such adjourned meeting
at which a quorum is present or represented, any business may be transacted that
might have been transacted at the meeting as originally notified.

     Section  2.7  Voting.  When a  quorum  is  present  at any  meeting  of the
Corporation's shareholders,  the vote of the holders of a majority of the shares
entitled to vote that are  actually  voted on any  question  brought  before the
meeting  will be  sufficient  to  decide  such  question;  provided  that if the
question  is one upon  which,  by express  provision  of law,  the  Articles  of
Incorporation  or these  Bylaws,  a different  vote is  required,  such  express
provision shall govern and control the decision of such question.

     Section 2.8 Method of Voting.  Each outstanding  share of the Corporation's
capital  stock,  regardless of class or series,  will be entitled to one vote on
each  matter  submitted  to a vote at a meeting of  shareholders,  except to the
extent  that the voting  rights of the shares of any class or series are limited
or denied by the Articles of Incorporation, as amended from time to time. At any
meeting of the shareholders,  every shareholder having the right to vote will be
entitled to vote in person or by proxy  executed in writing by such  shareholder
and  bearing a date not more than  eleven  (11)  months  prior to such  meeting,
unless  such  instrument  provides  for a  longer  period.  A  telegram,  telex,


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<PAGE>

cablegram  or  similar  transmission  by  the  shareholder,  or a  photographic,
photostatic,  facsimile  or similar  reproduction  of a writing  executed by the
shareholder,  shall be treated as an  execution  in writing for  purposes of the
preceding  sentence.  Each proxy will be  revocable  unless  expressly  provided
therein to be  irrevocable  and if,  and only so long as, it is coupled  with an
interest  sufficient in law to support an irrevocable  power. Such proxy will be
filed  with  the  Secretary  of the  Corporation  prior to or at the time of the
meeting.  Voting for Directors  will be in accordance  with Article III of these
Bylaws.  Voting on any  question or in any election may be by voice vote or show
of hands unless the presiding  officer  orders or any  shareholder  demands that
voting be by written ballot.

     Section 2.9 Record Date; Closing Transfer Books. The Board of Directors may
fix in  advance  a  record  date for the  purpose  of  determining  shareholders
entitled  to  notice  of or  to  vote  at a  meeting  of  shareholders,  or  any
adjournment thereof, or entitled to receive payment of any dividend, or in order
to make a  determination  of  shareholders  for any other proper  purpose,  such
record date to be not less than ten (10) nor more than  [fifty  (50)] days prior
to such meeting,  or the Board of Directors may close the stock  transfer  books
for such  purpose  for a period of not less  than ten (10) nor more than  [fifty
(50)] days prior to such  meeting.  In the absence of any action by the Board of
Directors,  the date upon which the notice of the  meeting is mailed will be the
record date.

     Section  2.10 Action by Consent.  Except as  prohibited  by law, any action
required or permitted by law, the Articles of  Incorporation  or these Bylaws to
be  taken at a  meeting  of the  shareholders  of the  Corporation  may be taken
without a meeting if a consent or consents in writing,  setting forth the action
so taken, is signed by the holders of outstanding stock having not less than the
minimum number of votes that would be necessary to authorize or take such action
at a meeting at which all shares entitled to vote thereon were present and voted
and will be delivered to the Corporation by delivery to its registered office in
Texas, its principal place of business or an officer or agent of the Corporation
having custody of the minute book.

                                  ARTICLE III

                               BOARD OF DIRECTORS

     Section 3.1 Management. The business and affairs of the Corporation will be
managed by or under the  direction of the Board of  Directors,  who may exercise
all such powers of the Corporation and do all such lawful acts and things as are
not by law, the Articles of  Incorporation  or these Bylaws directed or required
to be exercised or done by the shareholders.

     Section 3.2 Qualification;  Election; Term. None of the Directors need be a
shareholder  of the  Corporation  or a  resident  of the  State  of  Texas.  The
Directors  will be  elected  by  plurality  vote at the  annual  meeting  of the
shareholders,  except as hereinafter  provided,  and each Director  elected will
hold office until whichever of the following  occurs first:  the next succeeding
annual meeting and his successor is elected and qualified, his resignation,  his
removal from office by the shareholders or his death.

     Section 3.3 Number.  The number of Directors of the Corporation  will be at
least one (1) and not more than eight (8).  The number of  Directors  authorized
will be fixed as the Board of Directors may from time to time  designate,  or if
no such  designation  has been made, the number of Directors will be the same as
the number of  members of the  initial  Board of  Directors  as set forth in the
Articles of Incorporation. [No decrease in the number of Directors will have the
effect of shortening the term of any incumbent Director].



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<PAGE>

     Section 3.4  Removal.  Any  Director  may be removed  either for or without
cause at any special meeting of shareholders by the affirmative vote of at least
a  majority  in  number  of  shares  of the  shareholders  present  in person or
represented  by proxy at such  meeting and  entitled to vote for the election of
such Director.

     Section 3.5 Vacancies.  Any vacancy  occurring in the Board of Directors by
death, resignation, removal or otherwise may be filled by an affirmative vote of
at least a majority of the remaining  Directors though less than a quorum of the
Board of Directors. A Director elected to fill a vacancy will be elected for the
unexpired  term of his  predecessor in office.  A  directorship  to be filled by
reason of an increase in the number of  Directors  may be filled by the Board of
Directors  for a term of  office  only  until the next  election  of one or more
Directors by the shareholders.

     Section 3.6 Place of Meetings. Meetings of the Board of Directors,  regular
or  special,  may be held at such place  within or without the State of Texas as
may be fixed from time to time by the Board of Directors.

     Section 3.7 Annual  Meeting.  The first meeting of each newly elected Board
of Directors  will be held without  further  notice  immediately  following  the
annual  meeting  of  shareholders  and at the same  place,  unless by  unanimous
consent, the Directors then elected and serving shall change such time or place.

     Section 3.8 Regular  Meetings.  Regular  meetings of the Board of Directors
may be held  without  notice  at such  time and  place  as is from  time to time
determined by resolution of the Board of Directors.

     Section 3.9 Special  Meetings.  Special  meetings of the Board of Directors
may be called by the President on oral or written notice to each Director, given
either personally,  by telephone,  by telegram or by mail; special meetings will
be called on the written request of at least two (2) Directors. Except as may be
otherwise  expressly  provided by law,  the Articles of  Incorporation  or these
Bylaws,  neither  the  business  to be  transacted  at, nor the  purpose of, any
special meeting need be specified in a notice or waiver of notice.

     Section 3.10 Quorum. At all meetings of the Board of Directors the presence
of a majority of the number of Directors  then in office will be  necessary  and
sufficient  to  constitute a quorum for the  transaction  of  business,  and the
affirmative vote of at least a majority of the Directors  present at any meeting
at which there is a quorum will be the act of the Board of Directors,  except as
may be otherwise  specifically provided by law, the Articles of Incorporation or
these  Bylaws.  If a  quorum  is not  present  at any  meeting  of the  Board of
Directors,  the Directors  present  thereat may adjourn the meeting from time to
time without notice other than  announcement  at the meeting,  until a quorum is
present.

     Section 3.11 Interested  Directors.  No contract or transaction between the
Corporation  and  one or more of its  Directors  or  officers,  or  between  the
Corporation  and  any  other  corporation,  partnership,  association  or  other
organization in which one or more of the Corporation's Directors or officers are
Directors  or officers or have a  financial  interest,  will be void or voidable
solely for this reason,  solely because the Director or officer is present at or


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participates in the meeting of the Board of Directors or committee  thereof that
authorizes the contract or transaction, or solely because his or their votes are
counted for such purpose,  if: (i) the material facts as to his  relationship or
interest and as to the contract or transaction are disclosed or are known to the
Board of Directors or the committee,  and the Board of Directors or committee in
good faith  authorizes the contract or transaction by the affirmative  vote of a
majority of the disinterested Directors, even though the disinterested Directors
be less  than a  quorum,  (ii)  the  material  facts as to his  relationship  or
interest and as to the contract or transaction are disclosed or are known to the
shareholders  entitled  to vote  thereon,  and the  contract or  transaction  is
specifically  approved  in good faith by vote of the  shareholders  or (iii) the
contract  or  transaction  is fair as to the  Corporation  as of the  time it is
authorized,  approved or ratified by the Board of Directors, a committee thereof
or  the  shareholders.   Common  or  interested  Directors  may  be  counted  in
determining  the  presence of a quorum at a meeting of the Board of Directors or
of a committee that authorizes the contract or transaction.

     Section 3.12 Committees.  The Board of Directors may, by resolution  passed
by a majority  of the entire  Board of  Directors,  designate  committees,  each
committee  to consist of two (2) or more  Directors  of the  Corporation,  which
committees will have such power and authority and will perform such functions as
may be provided in such resolution.  Such committee or committees will have such
name or names as may be  designated  by the  Board of  Directors  and will  keep
regular  minutes  of their  proceedings  and  report  the  same to the  Board of
Directors when required.

     Section  3.13 Action by Consent.  Any action  required or  permitted  to be
taken at any meeting of the Board of Directors or any  committee of the Board of
Directors  may be taken  without  such a meeting  if a consent  or  consents  in
writing,  setting forth the action so taken, is signed by all the members of the
Board of Directors or such committee, as the case may be.

     Section  3.14  Compensation  of  Directors.  Directors  will  receive  such
compensation  for their  services and  reimbursement  for their  expenses as the
Board of Directors, by resolution,  may establish;  provided that nothing herein
contained   will  be  construed  to  preclude  any  Director  from  serving  the
Corporation in any other capacity and receiving compensation therefor.

     Section 3.15 Organization. The Board of Directors shall elect a Chairman to
preside at each meeting of the Board of Directors.  The Board of Directors shall
elect a Secretary to record the discussions and resolutions of each meeting.

                                   ARTICLE IV

                                     NOTICE

     Section 4.1 Form of Notice.  Whenever by law, the Articles of Incorporation
or these Bylaws,  notice is to be given to any Director or  shareholder,  and no
provision  is made as to how such  notice is to be  given,  such  notice  may be
given: (i) in writing,  by mail, postage prepaid,  addressed to such Director or
shareholder at such address as appears on the books of the  Corporation at least
three (3) days prior to the  meeting or (ii) in any other  method  permitted  by
law.  Any notice  required or permitted to be given by mail will be deemed to be
given at the time the same is deposited in the United States mail.




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     Section  4.2  Waiver.  Whenever  any notice is  required to be given to any
shareholder  or Director of the  Corporation as required by law, the Articles of
Incorporation  or these Bylaws, a waiver thereof in writing signed by the person
or persons  entitled to such notice,  whether before or after the time stated in
such notice,  will be equivalent  to the giving of such notice.  Attendance of a
shareholder or Director at a meeting will  constitute a waiver of notice of such
meeting,  except  where such  shareholder  or  Director  attends for the express
purpose of objecting, at the beginning of the meeting, to the transaction of any
business  on the  ground  that the  meeting  has not  been  lawfully  called  or
convened.  Members of the Board of Directors or any  committee  designed by such
Board  may  participate  in a  meeting  of the  Board or  committee  by means of
conference  telephone or similar  communications  equipment by which all persons
participating  in the  meeting  can  hear  each  other at the  same  time.  Such
participation shall constitute presence in person at the meeting.

                                    ARTICLE V

                               OFFICERS AND AGENTS

     Section 5.1 In General.  The officers of the Corporation will be elected by
the Board of Directors and will be a President,  Secretary and a Treasurer, each
of whom  shall be  eighteen  years old or older and who shall be  elected by the
Board of Directors at its annual meeting.  The Board of Directors may also elect
a Chairman of the Board, Vice Chairman of the Board, Vice Presidents,  Assistant
Vice  Presidents,   a  Treasurer,   and  Assistant   Secretaries  and  Assistant
Treasurers. Any two (2) or more offices may be held by the same person.

     Section 5.2 Election.  The Board of  Directors,  at its first meeting after
each annual meeting of shareholders,  will elect the officers, none of whom need
be a member of the Board of Directors.

     Section 5.3 Other  Officers  and Agents.  The Board of  Directors  may also
elect and appoint such other officers and agents as it deems necessary, who will
be elected  and  appointed  for such  terms and will  exercise  such  powers and
perform  such  duties  as may be  determined  from  time to time by the Board of
Directors.

     Section 5.4  Compensation.  The  compensation of all officers and agents of
the Corporation  will be fixed by the Board of Directors or any committee of the
Board of Directors, if so authorized by the Board of Directors.

     Section 5.5 Term of Office and  Removal.  Each  officer of the  Corporation
will hold office until the next succeeding annual meeting of the Board and until
their  respective  successors  are elected  and shall  qualify,  his death,  his
resignation  or removal from office,  or the election and  qualification  of his
successor,  whichever occurs first. Any officer or agent elected or appointed by
the Board of Directors may be removed at any time, for or without cause,  by the
affirmative  vote of a  majority  of the  entire  Board of  Directors,  but such
removal  will not  prejudice  the  contract  rights,  if any,  of the  person so
removed. If the office of any officer becomes vacant for any reason, the vacancy
may be filled by the Board of Directors.




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<PAGE>

     Section 5.6  Employment  and Other  Contracts.  The Board of Directors  may
authorize  any officer or officers or agent or agents to enter into any contract
or  execute  and  deliver  any  instrument  in  the  name  or on  behalf  of the
Corporation,  and  such  authority  may  be  general  or  confined  to  specific
instances.  The Board of  Directors  may,  when it believes  the interest of the
Corporation  will  best  be  served  thereby,   authorize  executive  employment
contracts  that will have terms no longer than ten (10) years and  contain  such
other terms and conditions as the Board of Directors deems appropriate.  Nothing
herein  will  limit  the  authority  of the  Board  of  Directors  to  authorize
employment contracts for shorter terms.

     Section 5.7 Chairman of the Board of  Directors.  If the Board of Directors
has  elected a Chairman  of the Board,  he will  preside at all  meetings of the
shareholders  and the Board of  Directors.  Except where by law the signature of
the  President  is  required,  the  Chairman  will  have the  same  power as the
President  to sign all  certificates,  contracts  and other  instruments  of the
Corporation.  During the absence or  disability of the  President,  the Chairman
will exercise the powers and perform the duties of the President.

     Section 5.8 President. The President will be the Chief Executive Officer of
the  Corporation  and,  subject to the control of the Board of  Directors,  will
supervise  and control all of the  business and affairs of the  Corporation.  He
will,  in the absence of the  Chairman of the Board,  preside at all meetings of
the shareholders and the Board of Directors.  The President will have all powers
and perform all duties  incident to the office of  President  and will have such
other powers and perform  such other  duties as the Board of Directors  may from
time to time prescribe.

     Section 5.9 Vice  Presidents.  Each Vice  President will have the usual and
customary  powers and perform  the usual and  customary  duties  incident to the
office of Vice President, and will have such other powers and perform such other
duties as the Board of Directors or any committee  thereof may from time to time
prescribe  or as the  President  may from time to time  delegate  to him. In the
absence or disability  of the  President  and the Chairman of the Board,  a Vice
President  designated  by the  Board of  Directors,  or in the  absence  of such
designation the Vice Presidents in the order of their seniority in office,  will
exercise the powers and perform the duties of the President.

     Section  5.10  Secretary.  The  Secretary  will attend all  meetings of the
shareholders  and record all votes and the minutes of all  proceedings in a book
to be kept for that  purpose.  The  Secretary  will  perform like duties for the
Board of Directors and  committees  thereof when  required.  The Secretary  will
give,  or cause to be given,  notice of all  meetings  of the  shareholders  and
special  meetings of the Board of  Directors.  The  Secretary  will keep in safe
custody the seal of the Corporation. The Secretary will be under the supervision
of the  President.  The  Secretary  will have such other powers and perform such
other duties as the Board of Directors may from time to time prescribe or as the
President may from time to time delegate to him.

     Section 5.11 Assistant Secretaries.  The Assistant Secretaries in the order
of their  seniority  in  office,  unless  otherwise  determined  by the Board of
Directors,  will, in the absence or disability  of the  Secretary,  exercise the
powers and perform the duties of the Secretary. They will have such other powers
and perform such other  duties as the Board of  Directors  may from time to time
prescribe or as the President may from time to time delegate to them.




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<PAGE>

     Section 5.12  Treasurer.  The Treasurer  will have  responsibility  for the
receipt and  disbursement of all corporate funds and securities,  will keep full
and accurate  accounts of such receipts and  disbursements,  and will deposit or
cause to be deposited all moneys and other  valuable  effects in the name and to
the credit of the  Corporation in such  depositories as may be designated by the
Board of Directors. The Treasurer will render to the Directors whenever they may
require it an account of the operating  results and  financial  condition of the
Corporation,  and will have such other  powers and perform  such other duties as
the Board of Directors  may from time to time  prescribe or as the President may
from time to time delegate to him.

     Section 5.13 Assistant Treasurers. The Assistant Treasurers in the order of
their  seniority  in  office,  unless  otherwise  determined  by  the  Board  of
Directors,  will, in the absence or disability  of the  Treasurer,  exercise the
powers and perform the duties of the Treasurer. They will have such other powers
and perform such other  duties as the Board of  Directors  may from time to time
prescribe or as the President may from time to time delegate to them.

     Section  5.14  Bonding.  The  Corporation  may secure a bond to protect the
Corporation from loss in the event of defalcation by any of the officers,  which
bond may be in such  form  and  amount  and with  such  surety  as the  Board of
Directors may deem appropriate.

                                   ARTICLE VI

                        CERTIFICATES REPRESENTING SHARES

     Section  6.1 Form of  Certificates.  Certificates,  in such  form as may be
determined by the Board of Directors,  representing shares to which shareholders
are entitled,  will be delivered to each shareholder.  Such certificates will be
consecutively  numbered and entered in the stock book of the Corporation as they
are issued.  Each  certificate will state on the face thereof the holder's name,
the  number,  class of shares,  and the par value of such  shares or a statement
that such shares are without par value.  They will be signed by the  Chairman or
Vice Chairman of the Board of Directors or by the President or a Vice  President
and by the  Treasurer  or an  Assistant  Treasurer  or by  the  Secretary  or an
Assistant  Secretary,  and may be sealed with the seal of the  Corporation  or a
facsimile  thereof.  If any certificate is countersigned by a transfer agent, or
an assistant  transfer  agent or registered  by a registrar,  either of which is
other than the Corporation or an employee of the Corporation,  the signatures of
the  Corporation's  officers may be facsimiles.  In case any officer or officers
who have signed,  or whose  facsimile  signature or signatures have been used on
such certificate or  certificates,  ceases to be such officer or officers of the
Corporation,  whether  because of death,  resignation or otherwise,  before such
certificate  or  certificates  have been  delivered  by the  Corporation  or its
agents,  such  certificate or  certificates  may  nevertheless be adopted by the
Corporation  and be issued and  delivered  as though  the person or persons  who
signed  such  certificate  or  certificates  or  whose  facsimile  signature  or
signatures  have been used thereon had not ceased to be such officer or officers
of the Corporation.

     Section 6.2 Lost Certificates. The Board of Directors may direct that a new
certificate  be issued  in place of any  certificate  theretofore  issued by the
Corporation  alleged  to have  been  lost or  destroyed,  upon the  making of an
affidavit  of that fact by the person  claiming  the  certificate  to be lost or
destroyed and lodge the same with the Secretary of the Corporation,  accompanied
by a signed application for a new certificate. Thereupon, and upon the giving of
a  satisfactory  bond of indemnity to the  Corporation  not  exceeding an amount



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double the value of the shares as represented by such certificate (the necessity
for such bond and the amount  required to be  determined  by the  President  and
Treasurer of the Corporation), a new certificate may be issued of the same tenor
and  representing  the same number,  class and series as were represented by the
certificate alleged to be lost, stolen or destroyed. When authorizing such issue
of a new  certificate,  the  Board  of  Directors,  in its  discretion  and as a
condition precedent to the issuance thereof,  may require the owner of such lost
or destroyed certificate, or his legal representative,  to advertise the same in
such manner as it may require  and/or to give the  Corporation  a bond,  in such
form,  in such  sum,  and with  such  surety  or  sureties  as it may  direct as
indemnity  against  any claim  that may be made  against  the  Corporation  with
respect  to the  certificate  alleged  to have  been lost or  destroyed.  When a
certificate has been lost,  apparently  destroyed or wrongfully  taken,  and the
holder of record fails to notify the Corporation  within a reasonable time after
such  holder has notice of it, and the  Corporation  registers a transfer of the
shares represented by the certificate  before receiving such  notification,  the
holder of record is precluded from making any claim against the  Corporation for
the transfer of a new certificate.

     Section  6.3  Transfer of Shares.  Subject to the terms of any  shareholder
agreement  relating  to the  transfer of shares or other  transfer  restrictions
contained in the Certificate of Incorporation or authorized  therein,  shares of
stock will be  transferable  only on the books of the  Corporation by the holder
thereof in person or by such holder's duly authorized  attorney.  Upon surrender
to the  Corporation  or the transfer  agent of the  Corporation of a certificate
representing   shares  duly  endorsed  or  accompanied  by  proper  evidence  of
succession,  assignment  or  authority  to  transfer  [and  payment of all taxes
therefore],  it will be the duty of the Corporation or the transfer agent of the
Corporation to issue a new  certificate to the person entitled  thereto,  cancel
the old certificate and record the transaction upon its books.

     Section 6.4  Transfer  Agent.  Unless  otherwise  specified by the Board of
Directors by resolution,  the Secretary of the Corporation shall act as transfer
agent of the  certificates  representing the shares of stock of the Corporation.
He shall  maintain a stock  transfer  book,  the stubs in which  shall set forth
among other things,  the names and addresses of the holders of all issued shares
of the Corporation,  the number of shares held by each, the certificate  numbers
representing  such shares,  the date of issue of the  certificates  representing
such shares,  and whether or not such shares  originate  from original  issue or
from  transfer.  Subject  to  Section  2.3,  the  names  and  addresses  of  the
shareholders  as they  appear on the stubs of the stock  transfer  book shall be
conclusive  evidence  as to who  are  the  shareholders  of  record  and as such
entitled  to receive  notice of the  meetings of  shareholders;  to vote at such
meetings;  to examine the list of the shareholders entitled to vote at meetings;
to receive  dividends;  and to own,  enjoy and  exercise  any other  property or
rights deriving from such shares against the Corporation. Each shareholder shall
be responsible  for notifying the Secretary in writing of any change in his name
or address and failure so to do will  relieve the  Corporation,  its  directors,
officers  and agents,  from  liability  for  failure to direct  notices or other
documents,  or pay over or transfer  dividends or other property or rights, to a
name or address  other than the name and  address  appearing  on the stub of the
stock transfer book.

     Section 6.5 Registered  Shareholders.  The Corporation  will be entitled to
treat the holder of record of any share or shares of stock as the holder in fact
thereof and, accordingly,  will not be bound to recognize any equitable or other
claim to or  interest  in such share or shares on the part of any other  person,
whether  or not it has  express or other  notice  thereof,  except as  otherwise
provided by law.



                                       9
<PAGE>

                                   ARTICLE VII

                               GENERAL PROVISIONS

     Section  7.1  Dividends.  Dividends  upon  the  outstanding  shares  of the
Corporation, subject to the provisions of the Articles of Incorporation, if any,
may be declared  by the Board of  Directors  at any regular or special  meeting.
Dividends  may be declared and paid in cash,  in  property,  or in shares of the
Corporation, subject to the provisions of the Texas Business Corporation Act and
the  Articles  of  Incorporation.  The Board of  Directors  may fix in advance a
record  date for the  purpose of  determining  shareholders  entitled to receive
payment of any dividend,  such record date to be not more than [fifty (50)] days
prior to the payment date of such dividend,  or the Board of Directors may close
the stock  transfer  books for such purpose for a period of not more than [fifty
(50)] days prior to the  payment  date of such  dividend.  In the absence of any
action by the Board of  Directors,  the date upon  which the Board of  Directors
adopts the resolution declaring such dividend will be the record date.

     Section 7.2  Reserves.  There may be created by  resolution of the Board of
Directors out of the surplus of the Corporation  such reserve or reserves as the
Directors  from time to time,  in their  discretion,  deem proper to provide for
contingencies,  or to equalize dividends,  or to repair or maintain any property
of the  Corporation,  or for  such  other  purpose  as the  Directors  may  deem
beneficial to the Corporation,  and the Directors may modify or abolish any such
reserve in the manner in which it was created. Surplus of the Corporation to the
extent so reserved  will not be available  for the payment of dividends or other
distributions by the Corporation.

     Section 7.3 Telephone  and Similar  Meetings.  Shareholders,  Directors and
committee  members may  participate  in and hold meetings by means of conference
telephone or similar communications equipment by which all persons participating
in the  meeting  can hear  each  other.  Participation  in such a  meeting  will
constitute presence in person at the meeting, except where a person participates
in the meeting for the express  purpose of  objecting,  at the  beginning of the
meeting,  to the  transaction of any business on the ground that the meeting had
not been lawfully called or convened.

     Section  7.4 Books and  Records.  The  Corporation  will keep  correct  and
complete  books and  records of account and  minutes of the  proceedings  of its
shareholders and Board of Directors,  and will keep at its registered  office or
principal  place  of  business,  or at the  office  of  its  transfer  agent  or
registrar,  a record of its shareholders,  giving the names and addresses of all
shareholders and the number and class of the shares held by each.

     Section 7.5 Fiscal Year. The fiscal year of the  Corporation  will be fixed
by resolution of the Board of Directors.

     Section 7.6 Seal.  The  Corporation  may have a seal,  and such seal may be
used by  causing  it or a  facsimile  thereof  to be  impressed  or  affixed  or
reproduced or otherwise.  Any officer of the Corporation  will have authority to
affix the seal to any document requiring it.



                                       10
<PAGE>

     Section 7.7  Indemnification.  The Corporation will indemnify its Directors
to the fullest extent  permitted by the Texas Business  Corporation Act and may,
if and to the extent  authorized  by the Board of  Directors,  so indemnify  its
officers  and any  other  person  whom it has the  power  to  indemnify  against
liability, reasonable expense or other matter whatsoever.

     Section 7.8 Insurance.  The  Corporation may at the discretion of the Board
of Directors  purchase and maintain  insurance on behalf of the  Corporation and
any person whom it has the power to  indemnify  pursuant to law, the Articles of
Incorporation, these Bylaws or otherwise.

     Section  7.9  Resignation.  Any  Director,  officer  or agent may resign by
giving written notice to the President or the Secretary.  Such  resignation will
take effect at the time specified therein or immediately if no time is specified
therein.  Unless otherwise specified therein, the acceptance of such resignation
will not be necessary to make it effective.

     Section 7.10 Amendment of Bylaws.  These Bylaws may be altered,  amended or
repealed at any meeting of the Board of  Directors at which a quorum is present,
by the affirmative vote of a majority of the Directors present at such meeting.

     Section  7.11  Invalid  Provisions.  If any  part of these  Bylaws  is held
invalid or inoperative for any reason,  the remaining  parts, so far as possible
and reasonable, will be valid and operative.

     Section  7.12  Relation  to  Articles of  Incorporation.  These  Bylaws are
subject to, and governed by, the Articles of Incorporation.





















                                       11

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>5
<FILENAME>mb10qsbex311063002.txt
<DESCRIPTION>SECTION 302 CERTIFICATION OF CEO & CFO
<TEXT>

EXHIBIT 31.1

                                 CERTIFICATION

I,  Scott A.  Haire, certify that:

     1. I have reviewed this quarterly report on Form 10-Q of MB Software, Inc.;

     2. Based on my knowledge, this quarterly 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 quarterly
report;

     3. Based on my knowledge,  the financial  statements,  and other  financial
information  included in this quarterly  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 quarterly 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 we 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 quarterly 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
quarterly report (the "Evaluation Date"); and

          c.  presented  in this  quarterly  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 function);

          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;

     6. The registrant's other certifying  officers and I have indicated in this
quarterly  report  whether or not there  were  significant  changes in  internal
controls or in other factors 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: Aug. 12 , 2003

/S/  Scott A. Haire
Scott A. Haire,
Chairman of the Board,
(Chief Executive Officer and Principal Financial Officer)






</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.1
<SEQUENCE>6
<FILENAME>mb10qsbex321063002.txt
<DESCRIPTION>SECTION 906 CERTIFICATION OF CEO & CFO
<TEXT>

EXHIBIT 32.1


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


In connection  with the  Quarterly  Report of (the Company) on Form 10-Q for the
period ending June 30, 2002 as filed with the Securities and Exchange Commission
on the date hereof (the Report),  I, Scott A. Haire, Chief Executive Officer and
principal financial officer of the Company,  certify,  pursuant to 18 U.S.C. ss.
1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:

     The Report fully complies with the  requirements  of section 13(a) or 15(d)
of the Securities Exchange Act of 1934; and

     The information  contained in the Report fairly  presents,  in all material
respects, the financial condition and result of operations of the Company.

/S/ Scott A. Haire
Scott A. Haire,
Chairman of the Board,
(Chief Executive Officer and Principal Financial Officer)



</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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