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<SEC-DOCUMENT>0001082324-03-000003.txt : 20030505
<SEC-HEADER>0001082324-03-000003.hdr.sgml : 20030505
<ACCEPTANCE-DATETIME>20030505131950
ACCESSION NUMBER:		0001082324-03-000003
CONFORMED SUBMISSION TYPE:	10QSB
PUBLIC DOCUMENT COUNT:		5
CONFORMED PERIOD OF REPORT:	20030331
FILED AS OF DATE:		20030505

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			PASW INC
		CENTRAL INDEX KEY:			0001082324
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-COMPUTER PROGRAMMING SERVICES [7371]
		IRS NUMBER:				770390628
		STATE OF INCORPORATION:			CA
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10QSB
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-26895
		FILM NUMBER:		03681697

	BUSINESS ADDRESS:	
		STREET 1:		703 RANCHO CONEJO BLVD
		CITY:			NEWBURY PARK
		STATE:			CA
		ZIP:			75081
		BUSINESS PHONE:		8054997722

	MAIL ADDRESS:	
		STREET 1:		703 RANCHO CONEJO BLVD
		STREET 2:		10390 SANTA MONICA BLVD, FOURTH FL
		CITY:			NEWBURY PARK
		STATE:			CA
		ZIP:			75801

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	PACIFIC SOFTWORKS INC
		DATE OF NAME CHANGE:	19990322
</SEC-HEADER>
<DOCUMENT>
<TYPE>10QSB
<SEQUENCE>1
<FILENAME>paswq103.htm
<TEXT>
<html>

<head>
<title></title>
</head>

<body LINK="#0000ff">
<font SIZE="3"><b>

<p ALIGN="CENTER">UNITED STATES</p>

<p ALIGN="CENTER">SECURITIES AND EXCHANGE COMMISSION</p>

<p ALIGN="CENTER">WASHINGTON, D.C. 20549</p>

<p ALIGN="CENTER">FORM 10-QSB</p>

<blockquote>
  <p align="center">QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE</p>
</blockquote>

<p ALIGN="CENTER">SECURITIES EXCHANGE ACT OF 1934</p>

<p ALIGN="CENTER">For the quarterly period ended March 31, 2003</p>

<p ALIGN="CENTER">OR</p>

<p ALIGN="CENTER">( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934</p>

<p ALIGN="CENTER">Commission file number 333-75137</p>

<p ALIGN="CENTER">PASW, INC.</p>

<p ALIGN="CENTER">(Exact name of registrant as specified in its charter)</p>
</b></font>

<table CELLSPACING="0" BORDER="0" CELLPADDING="7" WIDTH="836">
  <tr>
    <td WIDTH="147" VALIGN="TOP"></td>
    <td WIDTH="315" VALIGN="TOP"><font SIZE="3"><b><p ALIGN="CENTER">California</b></font></td>
    <td WIDTH="332" VALIGN="TOP"><font SIZE="3"><b><p ALIGN="CENTER">77-0390628</b></font></td>
  </tr>
  <tr>
    <td WIDTH="147" VALIGN="TOP"></td>
    <td WIDTH="315" VALIGN="TOP"><b><p ALIGN="CENTER">(State or other jurisdiction of<font
    SIZE="3"> incorporation or organization)</font></b></td>
    <td WIDTH="332" VALIGN="TOP"><font SIZE="3"><b><p ALIGN="CENTER">(I.R.S. Employer
    Identification No.)</b></font></td>
  </tr>
</table>

<table CELLSPACING="0" BORDER="0" CELLPADDING="7" WIDTH="842">
  <tr>
    <td WIDTH="147" VALIGN="TOP"></td>
    <td WIDTH="313" VALIGN="TOP"><font SIZE="3"><b><p ALIGN="CENTER">9453 Alcosta Boulevard </p>
    <p ALIGN="CENTER">San Ramon, California</b></font></td>
    <td WIDTH="340" VALIGN="BOTTOM"><font SIZE="3"><b><p ALIGN="CENTER">94583</b></font></td>
  </tr>
  <tr>
    <td WIDTH="147" VALIGN="TOP"></td>
    <td WIDTH="313" VALIGN="TOP"><font SIZE="3"><b><p ALIGN="CENTER">(Address of principal
    executive offices)</b></font></td>
    <td WIDTH="340" VALIGN="TOP"><font SIZE="3"><b><p ALIGN="CENTER">(Zip Code)</b></font></td>
  </tr>
</table>
<font SIZE="3"><b>

<p ALIGN="CENTER">(925) 828-0934</p>

<p ALIGN="CENTER">Registrant&#146;s telephone number, including area code)</p>

<p>Indicate by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90 days.</p>

<p>Yes _<u> X</u>__ No____</p>

<p>There were 4,997,400 shares outstanding of the registrant&#146;s Common Stock, par
value $.001 per share, as of May 2, 2003.</p>

<p ALIGN="CENTER">&nbsp;</p>

<p ALIGN="CENTER">PASW, INC.</p>
</b></font>

<table CELLSPACING="0" BORDER="0" CELLPADDING="7" WIDTH="618">
  <tr>
    <td WIDTH="1" VALIGN="TOP"></td>
    <td WIDTH="570" VALIGN="BOTTOM" COLSPAN="2"><font SIZE="3"><b><p ALIGN="CENTER">INDEX</b></font></td>
    <td WIDTH="46" VALIGN="TOP"><font SIZE="3"><b><p ALIGN="CENTER">Page No.</b></font></td>
  </tr>
  <tr>
    <td WIDTH="1" VALIGN="TOP"></td>
    <td WIDTH="570" VALIGN="TOP" COLSPAN="2"><font SIZE="3"><b><p ALIGN="CENTER">PART I &#150;
    FINANCIAL INFORMATION</b></font></td>
    <td WIDTH="46" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="544" VALIGN="TOP" COLSPAN="3"><font SIZE="3"><b>Item l. Financial Statements
    (Unaudited):</b></font></td>
    <td WIDTH="46" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="1" VALIGN="TOP"></td>
    <td WIDTH="570" VALIGN="TOP" COLSPAN="2"><font SIZE="3"><b>Balance Sheets at March 31,
    2003 and December 31, 2002</b></font></td>
    <td WIDTH="46" VALIGN="TOP"><font SIZE="3"><b><p ALIGN="CENTER">3</b></font></td>
  </tr>
  <tr>
    <td WIDTH="1" VALIGN="TOP"></td>
    <td WIDTH="570" VALIGN="TOP" COLSPAN="2"><font SIZE="3"><b>Statements of Operations for
    the three months ended March 31, 2003 and 2002 </b></font></td>
    <td WIDTH="46" VALIGN="BOTTOM"><font SIZE="3"><b><p ALIGN="CENTER">5</b></font></td>
  </tr>
  <tr>
    <td WIDTH="1" VALIGN="TOP"></td>
    <td WIDTH="570" VALIGN="TOP" COLSPAN="2"><font SIZE="3"><b>Statements of Cash Flows for
    the three months ended March 31, 2003 and 2002</b></font></td>
    <td WIDTH="46" VALIGN="bottom"><font SIZE="3"><b><p ALIGN="CENTER">7</b></font></td>
  </tr>
  <tr>
    <td WIDTH="1" VALIGN="TOP"></td>
    <td WIDTH="570" VALIGN="TOP" COLSPAN="2"><font SIZE="3"><b>Notes to Condensed Financial
    Statements</b></font></td>
    <td WIDTH="46" VALIGN="TOP"><font SIZE="3"><b><p ALIGN="CENTER">8</b></font></td>
  </tr>
  <tr>
    <td WIDTH="544" VALIGN="TOP" COLSPAN="3"><b><font SIZE="3">Item 2. Management&#146;s
    Discussion and Analysis or</font> <font SIZE="3">Plan of Operations</font></b></td>
    <td WIDTH="46" VALIGN="TOP"><font SIZE="3"><b><p ALIGN="CENTER">9</b></font></td>
  </tr>
  <tr>
    <td WIDTH="1" VALIGN="TOP"></td>
    <td WIDTH="570" VALIGN="TOP" COLSPAN="2"><font SIZE="3"><b><p ALIGN="CENTER">PART II
    &#150; OTHER INFORMATION</b></font></td>
    <td WIDTH="46" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="544" VALIGN="TOP" COLSPAN="3"><font SIZE="3"><b>Item 1. Legal Proceedings</b></font></td>
    <td WIDTH="46" VALIGN="TOP"><font SIZE="3"><b><p ALIGN="CENTER">15</b></font></td>
  </tr>
  <tr>
    <td WIDTH="544" VALIGN="TOP" COLSPAN="3"><font SIZE="3"><b>Item 2. Changes in Securities
    and Use of Proceeds</b></font></td>
    <td WIDTH="46" VALIGN="TOP"><font SIZE="3"><b><p ALIGN="CENTER">15</b></font></td>
  </tr>
  <tr>
    <td WIDTH="544" VALIGN="TOP" COLSPAN="3"><font SIZE="3"><b>Item 3. Defaults Upon Senior
    Securities</b></font></td>
    <td WIDTH="46" VALIGN="TOP"><font SIZE="3"><b><p ALIGN="CENTER">15</b></font></td>
  </tr>
  <tr>
    <td WIDTH="544" VALIGN="TOP" COLSPAN="3"><font SIZE="3"><b>Item 4. Submission of Matters
    to a Vote of Security Holders</b></font></td>
    <td WIDTH="46" VALIGN="TOP"><font SIZE="3"><b><p ALIGN="CENTER">15</b></font></td>
  </tr>
  <tr>
    <td WIDTH="544" VALIGN="TOP" COLSPAN="3"><font SIZE="3"><b>Item 5. Other Information</b></font></td>
    <td WIDTH="46" VALIGN="TOP"><font SIZE="3"><b><p ALIGN="CENTER">15</b></font></td>
  </tr>
  <tr>
    <td WIDTH="544" VALIGN="TOP" COLSPAN="3"><font SIZE="3"><b>Item 6. Exhibits and Reports on
    Form 8-K</b></font></td>
    <td WIDTH="46" VALIGN="TOP"><font SIZE="3"><b><p ALIGN="CENTER">15</b></font></td>
  </tr>
  <tr>
    <td WIDTH="544" VALIGN="TOP" COLSPAN="3" HEIGHT="19"><font SIZE="3"><b>Signatures</b></font></td>
    <td WIDTH="46" VALIGN="TOP" HEIGHT="19"><font SIZE="3"><b><p ALIGN="CENTER">16</b></font></td>
  </tr>
  <tr>
    <td WIDTH="880" VALIGN="TOP" COLSPAN="2"><font SIZE="3"><b>Exhibit 99.1</b></font></td>
    <td WIDTH="1" VALIGN="top" align="right"></td>
    <td WIDTH="0" VALIGN="top" align="right"><font SIZE="3"><b><p align="center">17</b></font></td>
  </tr>
  <tr>
    <td WIDTH="880" VALIGN="TOP" COLSPAN="2"><font SIZE="3"><b>Exhibit 99.2</b></font></td>
    <td WIDTH="1" VALIGN="TOP"></td>
    <td WIDTH="0" VALIGN="TOP"><font SIZE="3"><b><p align="center">18</b></font></td>
  </tr>
</table>
<font SIZE="3"><b>

<p align="center">- 2 -</p>

<p ALIGN="CENTER">PART I &#150; FINANCIAL INFORMATION</p>

<p>ITEM 1. FINANCIAL STATEMENTS</p>

<p ALIGN="CENTER">PASW, INC.</p>

<p ALIGN="CENTER">CONSOLIDATED BALANCE SHEETS</p>

<blockquote>
  <blockquote>
    <blockquote>
      <blockquote>
        <blockquote>
          <blockquote>
            <blockquote>
              <blockquote>
                <blockquote>
                  <blockquote>
                    <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (Unaudited)</p>
                  </blockquote>
                </blockquote>
              </blockquote>
            </blockquote>
          </blockquote>
        </blockquote>
      </blockquote>
    </blockquote>
  </blockquote>
</blockquote>
</b></font>

<table BORDER="0" CELLSPACING="0" CELLPADDING="7" WIDTH="595">
  <tr>
    <td WIDTH="59%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="top" style="border-bottom: thin solid"><font SIZE="3"><b><p
    ALIGN="CENTER">March 31,</p>
    <p ALIGN="CENTER">2003</b></font></td>
    <td WIDTH="3%" VALIGN="TOP" HEIGHT="20"></td>
    <td WIDTH="19%" VALIGN="top" style="border-bottom: thin solid"><font SIZE="3"><b><p
    ALIGN="CENTER">December 31, </p>
    <p ALIGN="CENTER">2002</b></font></td>
  </tr>
  <tr>
    <td WIDTH="59%" VALIGN="TOP" HEIGHT="20"><font SIZE="3"><b>ASSETS</b></font></td>
    <td WIDTH="19%" VALIGN="TOP" HEIGHT="20"></td>
    <td WIDTH="3%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="TOP" HEIGHT="20"></td>
  </tr>
  <tr>
    <td WIDTH="59%" VALIGN="TOP"><font SIZE="3"><b>Current assets:</b></font></td>
    <td WIDTH="19%" VALIGN="TOP"></td>
    <td WIDTH="3%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="59%" VALIGN="TOP"><font SIZE="3"><b>Cash and cash equivalents</b></font></td>
    <td WIDTH="19%" VALIGN="BOTTOM"><font SIZE="3"><b><p ALIGN="RIGHT">$ 99,317</b></font></td>
    <td WIDTH="3%" VALIGN="TOP" HEIGHT="20"></td>
    <td WIDTH="19%" VALIGN="BOTTOM"><font SIZE="3"><b><p ALIGN="RIGHT">$ 98,901</b></font></td>
  </tr>
  <tr>
    <td WIDTH="59%" VALIGN="TOP"><font SIZE="3"><b>Accounts receivable, net of allowance of <p>$0
    and $0</b></font></td>
    <td WIDTH="19%" VALIGN="bottom" style="border-bottom: thin solid"><font SIZE="3"><b><p
    ALIGN="RIGHT">11,039</b></font></td>
    <td WIDTH="3%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="bottom" style="border-bottom: thin solid"><font SIZE="3"><b><p
    ALIGN="RIGHT">32,842</b></font></td>
  </tr>
  <tr>
    <td WIDTH="59%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="BOTTOM"></td>
    <td WIDTH="3%" VALIGN="BOTTOM"></td>
    <td WIDTH="19%" VALIGN="BOTTOM"></td>
  </tr>
  <tr>
    <td WIDTH="59%" VALIGN="TOP"><font SIZE="3"><b>Total current assets</b></font></td>
    <td WIDTH="19%" VALIGN="BOTTOM"><font SIZE="3"><b><p ALIGN="RIGHT">110,356</b></font></td>
    <td WIDTH="3%" VALIGN="BOTTOM"></td>
    <td WIDTH="19%" VALIGN="BOTTOM"><font SIZE="3"><b><p ALIGN="RIGHT">131,743</b></font></td>
  </tr>
  <tr>
    <td WIDTH="59%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="BOTTOM"></td>
    <td WIDTH="3%" VALIGN="BOTTOM"></td>
    <td WIDTH="19%" VALIGN="BOTTOM"></td>
  </tr>
  <tr>
    <td WIDTH="59%" VALIGN="TOP" HEIGHT="55"><font SIZE="3"><b>Property and equipment less
    accumulated depreciation and amortization of $0 and $17,985</b></font></td>
    <td WIDTH="19%" VALIGN="BOTTOM" HEIGHT="55"><p align="right"><strong>0</strong></td>
    <td WIDTH="3%" VALIGN="BOTTOM" HEIGHT="55"></td>
    <td WIDTH="19%" VALIGN="BOTTOM" HEIGHT="55"><font SIZE="3"><b><p ALIGN="RIGHT">4,242</b></font></td>
  </tr>
  <tr>
    <td WIDTH="59%" VALIGN="TOP" HEIGHT="24"><font SIZE="3"><b>Other assets</b></font></td>
    <td WIDTH="19%" VALIGN="BOTTOM" HEIGHT="24" style="border-bottom: thin solid"><font
    SIZE="3"><b><p ALIGN="RIGHT">6,049</b></font></td>
    <td WIDTH="3%" VALIGN="TOP" HEIGHT="20"></td>
    <td WIDTH="19%" VALIGN="BOTTOM" HEIGHT="24" style="border-bottom: thin solid"><font
    SIZE="3"><b><p ALIGN="RIGHT">6,116</b></font></td>
  </tr>
  <tr>
    <td WIDTH="59%" VALIGN="TOP" HEIGHT="24"><font SIZE="3"><b>Total assets</b></font></td>
    <td WIDTH="19%" VALIGN="bottom" HEIGHT="24" style="border-bottom: thin solid"><font
    SIZE="3"><b><p ALIGN="RIGHT">$ 116,405</b></font></td>
    <td WIDTH="3%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="BOTTOM" HEIGHT="24" style="border-bottom: thin solid"><font
    SIZE="3"><b><p ALIGN="RIGHT">$ 142,101</b></font></td>
  </tr>
</table>
<b><font FACE="Courier New" SIZE="3">

<p>&nbsp;</p>
</font><font SIZE="3">

<p>See accompanying notes to condensed financial statements.</p>

<p align="center">- 3 -</p>

<p ALIGN="CENTER">PASW, INC.</p>

<p ALIGN="CENTER">CONSOLIDATED BALANCE SHEETS</p>

<blockquote>
  <blockquote>
    <blockquote>
      <blockquote>
        <blockquote>
          <blockquote>
            <blockquote>
              <blockquote>
                <blockquote>
                  <blockquote>
                    <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (Unaudited)</p>
                  </blockquote>
                </blockquote>
              </blockquote>
            </blockquote>
          </blockquote>
        </blockquote>
      </blockquote>
    </blockquote>
  </blockquote>
</blockquote>
</font></b>

<table BORDER="0" CELLSPACING="0" CELLPADDING="7" WIDTH="598" height="686">
  <tr>
    <td WIDTH="355" VALIGN="TOP" height="97"></td>
    <td WIDTH="79" VALIGN="TOP" height="97" style="border-bottom: thin solid"><font SIZE="3"><b><p
    ALIGN="CENTER">&nbsp;</p>
    <p ALIGN="CENTER">March 31,</p>
    <p ALIGN="CENTER">2003</b></font></td>
    <td WIDTH="3" VALIGN="TOP" height="21"></td>
    <td WIDTH="105" VALIGN="bottom" height="97" style="border-bottom: thin solid"><font
    SIZE="3"><b><p ALIGN="CENTER">December 31, </p>
    <p ALIGN="CENTER">2002</b></font></td>
  </tr>
  <tr>
    <td WIDTH="355" VALIGN="TOP" height="21"><font SIZE="3"><b>LIABILITIES AND
    STOCKHOLDERS&#146;EQUITY</b></font></td>
    <td WIDTH="79" VALIGN="TOP" height="21"></td>
    <td WIDTH="3" VALIGN="TOP" height="21"></td>
    <td WIDTH="105" VALIGN="TOP" height="21"></td>
  </tr>
  <tr>
    <td WIDTH="355" VALIGN="TOP" height="21"><font SIZE="3"><b>Current liabilities:</b></font></td>
    <td WIDTH="79" VALIGN="TOP" height="21"></td>
    <td WIDTH="3" VALIGN="TOP" height="21"></td>
    <td WIDTH="105" VALIGN="TOP" height="21"></td>
  </tr>
  <tr>
    <td WIDTH="355" VALIGN="TOP" height="21"><font SIZE="3"><b>Accounts payable and accrued
    expenses</b></font></td>
    <td WIDTH="79" VALIGN="TOP" height="21"><font SIZE="3"><b><p ALIGN="RIGHT">$ 81,619</b></font></td>
    <td WIDTH="3" VALIGN="TOP" height="21"></td>
    <td WIDTH="105" VALIGN="TOP" height="21"><font SIZE="3"><b><p ALIGN="RIGHT">$ 108,859</b></font></td>
  </tr>
  <tr>
    <td VALIGN="top" width="355"><font SIZE="3"><b>Advances payable &#150; related party</b></font></td>
    <td VALIGN="top" style="border-top: medium; border-bottom: thin solid" width="79"><font
    SIZE="3"><b><p ALIGN="RIGHT">32,075</b></font></td>
    <td WIDTH="3" VALIGN="TOP" height="21"></td>
    <td VALIGN="top" style="border-top: medium; border-bottom: thin solid" width="105"><font
    SIZE="3"><b><p ALIGN="RIGHT">32,075 </b></font></td>
  </tr>
  <tr>
    <td WIDTH="355" VALIGN="TOP" HEIGHT="21"><font SIZE="3"><b>Total current liabilities</b></font></td>
    <td WIDTH="79" VALIGN="top" HEIGHT="21"
    style="border-top: medium; border-bottom: thin solid"><p align="right"><font SIZE="3"><b>$113,694</b></font></td>
    <td WIDTH="3" VALIGN="TOP" height="21"></td>
    <td WIDTH="105" VALIGN="top" HEIGHT="21"
    style="border-top: medium; border-bottom: thin solid"><p align="right"><font SIZE="3"><b>$140,934</b></font></td>
  </tr>
  <tr>
    <td WIDTH="355" VALIGN="TOP" HEIGHT="21"><font SIZE="3"><b>Commitments and contingencies</b></font></td>
    <td WIDTH="79" VALIGN="TOP" HEIGHT="21"></td>
    <td WIDTH="3" VALIGN="TOP" HEIGHT="21"></td>
    <td WIDTH="105" VALIGN="TOP" HEIGHT="21"></td>
  </tr>
  <tr>
    <td WIDTH="355" VALIGN="TOP" height="21"><font SIZE="3"><b>Stockholders&#146; equity:</b></font></td>
    <td WIDTH="79" VALIGN="TOP" height="21"></td>
    <td WIDTH="3" VALIGN="TOP" height="21"></td>
    <td WIDTH="105" VALIGN="TOP" height="21"></td>
  </tr>
  <tr>
    <td WIDTH="355" VALIGN="TOP" height="40"><font SIZE="3"><b>Preferred stock, par value $.01
    per share, 10,000,000 shares authorized; no shares outstanding</b></font></td>
    <td WIDTH="79" VALIGN="bottom" height="40"><font SIZE="3"><b><p ALIGN="RIGHT">0</b></font></td>
    <td WIDTH="3" VALIGN="bottom" height="40"></td>
    <td WIDTH="105" VALIGN="bottom" height="40"><font SIZE="3"><b><p ALIGN="RIGHT">0</b></font></td>
  </tr>
  <tr>
    <td WIDTH="355" VALIGN="TOP" height="59"><font SIZE="3"><b>Common stock, par value $.001
    per share, 50,000,000 shares authorized; 4,997,400 and 4,997,400 shares issued and
    outstanding</b></font></td>
    <td WIDTH="79" VALIGN="bottom" height="59"><font SIZE="3"><b><p ALIGN="RIGHT">4,998</b></font></td>
    <td WIDTH="3" VALIGN="bottom" height="59"></td>
    <td WIDTH="105" VALIGN="bottom" height="59"><font SIZE="3"><b><p ALIGN="RIGHT">4,998</b></font></td>
  </tr>
  <tr>
    <td WIDTH="355" VALIGN="TOP" height="21"><font SIZE="3"><b>Additional paid in capital</b></font></td>
    <td WIDTH="79" VALIGN="TOP" height="21"><font SIZE="3"><b><p ALIGN="RIGHT">6,398,754</b></font></td>
    <td WIDTH="3" VALIGN="TOP" height="21"></td>
    <td WIDTH="105" VALIGN="TOP" height="21"><font SIZE="3"><b><p ALIGN="RIGHT">6,398,754</b></font></td>
  </tr>
  <tr>
    <td WIDTH="355" VALIGN="TOP" height="21"><font SIZE="3"><b>Accumulated deficit</b></font></td>
    <td WIDTH="79" VALIGN="TOP" height="21"><font SIZE="3"><b><p ALIGN="RIGHT">(6,395,484)</b></font></td>
    <td WIDTH="3" VALIGN="TOP" height="21"></td>
    <td WIDTH="105" VALIGN="TOP" height="21"><font SIZE="3"><b><p ALIGN="RIGHT">(6,402,763)</b></font></td>
  </tr>
  <tr>
    <td VALIGN="TOP" width="355"><font SIZE="3"><b>Cumulative adjustment for currency
    translation</b></font></td>
    <td VALIGN="top" style="border-bottom: thin solid" width="79"><font SIZE="3"><b><p
    ALIGN="RIGHT">(5,557)</b></font></td>
    <td VALIGN="bottom" width="3"></td>
    <td VALIGN="top" style="border-bottom: thin solid" width="105"><font SIZE="3"><b><p
    ALIGN="RIGHT">178</b></font></td>
  </tr>
  <tr>
    <td WIDTH="355" VALIGN="TOP" height="21"><font SIZE="3"><b>Total stockholders&#146; equity</b></font></td>
    <td WIDTH="79" VALIGN="top" height="21" style="border-bottom: thin solid"><font SIZE="3"><b><p
    ALIGN="RIGHT">2,711</b></font></td>
    <td WIDTH="3" VALIGN="TOP" height="21"></td>
    <td WIDTH="105" VALIGN="top" height="21" style="border-bottom: thin solid"><font SIZE="3"><b><p
    ALIGN="RIGHT">1,167</b></font></td>
  </tr>
  <tr>
    <td WIDTH="355" VALIGN="TOP" height="21"></td>
    <td WIDTH="79" VALIGN="top" height="21" style="border-bottom: thin solid"><font SIZE="3"><b><p
    ALIGN="RIGHT">$ 116,405</b></font></td>
    <td WIDTH="3" VALIGN="TOP" height="21"></td>
    <td WIDTH="105" VALIGN="top" height="21" style="border-bottom: thin solid"><font SIZE="3"><b><p
    ALIGN="RIGHT">$ 142,101</b></font></td>
  </tr>
</table>
<b><font SIZE="3">

<p>See accompanying notes to condensed financial statements.</p>
</font><font FACE="Courier New" SIZE="3">

<p>&nbsp;</p>
</font><font SIZE="3">

<p>&nbsp;</p>

<p ALIGN="center">- 4 -</p>

<p ALIGN="CENTER">PASW, INC.</p>

<p ALIGN="CENTER">CONSOLIDATED STATEMENTS OF OPERATIONS</p>

<p>(Unaudited)</p>
</font></b>

<table BORDER="0" CELLSPACING="0" CELLPADDING="7" WIDTH="607">
  <tr>
    <td WIDTH="60%" VALIGN="TOP"></td>
    <td WIDTH="40%" VALIGN="top" COLSPAN="3" style="border-bottom: thin solid"><font SIZE="3"><b><p
    ALIGN="CENTER">For the Three Months Ended </b></font></td>
  </tr>
  <tr>
    <td WIDTH="60%" VALIGN="TOP"></td>
    <td WIDTH="18%" VALIGN="top" style="border-bottom: thin solid"><font SIZE="3"><b><p
    ALIGN="CENTER">March 31,</p>
    <p ALIGN="CENTER">2003</b></font></td>
    <td WIDTH="3%" VALIGN="TOP" HEIGHT="5"></td>
    <td WIDTH="19%" VALIGN="top" style="border-bottom: thin solid"><font SIZE="3"><b><p
    ALIGN="CENTER">March 31,</p>
    <p ALIGN="CENTER">2002</b></font></td>
  </tr>
  <tr>
    <td WIDTH="60%" VALIGN="TOP" HEIGHT="5"></td>
    <td WIDTH="18%" VALIGN="TOP" HEIGHT="5"></td>
    <td WIDTH="3%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="TOP" HEIGHT="5"><font SIZE="3"><u><b><p ALIGN="CENTER">Restated</b></u></font></td>
  </tr>
  <tr>
    <td WIDTH="60%" VALIGN="TOP" HEIGHT="5"><font SIZE="3"><b>Revenue</b></font></td>
    <td WIDTH="18%" VALIGN="TOP" HEIGHT="5"></td>
    <td WIDTH="3%" VALIGN="TOP" HEIGHT="5"></td>
    <td WIDTH="19%" VALIGN="TOP" HEIGHT="5"></td>
  </tr>
  <tr>
    <td WIDTH="60%" VALIGN="TOP"><font SIZE="3"><b>Product sales</b></font></td>
    <td WIDTH="18%" VALIGN="TOP"><font SIZE="3"><b><p ALIGN="RIGHT">$ 0 </b></font></td>
    <td WIDTH="3%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="TOP"><font SIZE="3"><b><p ALIGN="RIGHT">$ 0 </b></font></td>
  </tr>
  <tr>
    <td WIDTH="60%" VALIGN="TOP"><font SIZE="3"><b>Royalties and other </b></font></td>
    <td WIDTH="18%" VALIGN="top" style="border-bottom: thin solid"><font SIZE="3"><b><p
    ALIGN="RIGHT">46,844</b></font></td>
    <td WIDTH="3%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="top" style="border-bottom: thin solid"><font SIZE="3"><b><p
    ALIGN="RIGHT">36,470</b></font></td>
  </tr>
  <tr>
    <td WIDTH="60%" VALIGN="TOP"></td>
    <td WIDTH="18%" VALIGN="TOP"><font SIZE="3"><b><p ALIGN="RIGHT">46,844</b></font></td>
    <td WIDTH="3%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="TOP"><font SIZE="3"><b><p ALIGN="RIGHT">36,470</b></font></td>
  </tr>
  <tr>
    <td WIDTH="60%" VALIGN="TOP"></td>
    <td WIDTH="18%" VALIGN="TOP"></td>
    <td WIDTH="3%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="60%" VALIGN="TOP"><font SIZE="3"><b>Cost of revenue </b></font></td>
    <td WIDTH="18%" VALIGN="TOP"></td>
    <td WIDTH="3%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="60%" VALIGN="TOP"><font SIZE="3"><b>Purchases and royalty fees</b></font></td>
    <td WIDTH="18%" VALIGN="top" style="border-bottom: thin solid"><font SIZE="3"><b><p
    ALIGN="RIGHT">0</b></font></td>
    <td WIDTH="3%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="top" style="border-bottom: thin solid"><font SIZE="3"><b><p
    ALIGN="RIGHT">0</b></font></td>
  </tr>
  <tr>
    <td WIDTH="60%" VALIGN="TOP"></td>
    <td WIDTH="18%" VALIGN="TOP"></td>
    <td WIDTH="3%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="60%" VALIGN="TOP"><font SIZE="3"><b>Gross profit</b></font></td>
    <td WIDTH="18%" VALIGN="top" style="border-bottom: thin solid"><font SIZE="3"><b><p
    ALIGN="right">46,844</b></font></td>
    <td WIDTH="3%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="top" style="border-bottom: thin solid"><font SIZE="3"><b><p
    ALIGN="CENTER">36,470</b></font></td>
  </tr>
  <tr>
    <td WIDTH="60%" VALIGN="TOP"></td>
    <td WIDTH="18%" VALIGN="TOP"></td>
    <td WIDTH="3%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="60%" VALIGN="TOP"><font SIZE="3"><b>Expenses:</b></font></td>
    <td WIDTH="18%" VALIGN="TOP"></td>
    <td WIDTH="3%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="60%" VALIGN="TOP"><font SIZE="3"><b>Selling, general and administrative</b></font></td>
    <td WIDTH="18%" VALIGN="TOP"><font SIZE="3"><b><p ALIGN="RIGHT">40,984</b></font></td>
    <td WIDTH="3%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="TOP"><font SIZE="3"><b><p ALIGN="right">53,932</b></font></td>
  </tr>
  <tr>
    <td WIDTH="60%" VALIGN="TOP"><font SIZE="3"><b>Depreciation and amortization</b></font></td>
    <td WIDTH="18%" VALIGN="top" align="right" style="border-bottom: thin solid"><font
    SIZE="3"><b><p ALIGN="right">0 </b></font></td>
    <td WIDTH="3%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="top" style="border-bottom: thin solid"><font SIZE="3"><b><p
    ALIGN="right">800</b></font></td>
  </tr>
  <tr>
    <td WIDTH="60%" VALIGN="TOP" HEIGHT="6"><font SIZE="3"><b>Total operating expenses</b></font></td>
    <td WIDTH="18%" VALIGN="top" HEIGHT="6" style="border-bottom: thin solid"><font SIZE="3"><b><p
    ALIGN="RIGHT">40,984</b></font></td>
    <td WIDTH="3%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="top" HEIGHT="6" style="border-bottom: thin solid"><font SIZE="3"><b><p
    ALIGN="RIGHT">54,732</b></font></td>
  </tr>
  <tr>
    <td WIDTH="60%" VALIGN="TOP" HEIGHT="42"><font SIZE="3"><b>Gain (loss) from continuing
    operations before income taxes</b></font></td>
    <td WIDTH="18%" VALIGN="bottom" HEIGHT="42"><font SIZE="3"><b><p ALIGN="right">5,860</b></font></td>
    <td WIDTH="3%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="bottom" HEIGHT="42"><font SIZE="3"><b><p ALIGN="RIGHT">(18,262)</b></font></td>
  </tr>
  <tr>
    <td WIDTH="60%" VALIGN="TOP"><font SIZE="3"><b>Other income: Gain on sale of fixed assets
    &#150; net of depreciation</b></font></td>
    <td WIDTH="18%" VALIGN="bottom" style="border-bottom: thin solid"><font SIZE="3"><b><p
    ALIGN="right">4,627</b></font></td>
    <td WIDTH="3%" VALIGN="bottom" HEIGHT="42"></td>
    <td WIDTH="19%" VALIGN="bottom" style="border-bottom: thin solid"><p align="right"><font
    SIZE="3"><b>0 </b></font></td>
  </tr>
  <tr>
    <td WIDTH="60%" VALIGN="TOP" HEIGHT="19"><font SIZE="3"><b>Gain (loss) from continuing
    operations </b></font></td>
    <td WIDTH="18%" VALIGN="TOP" HEIGHT="19"><font SIZE="3"><b><p ALIGN="RIGHT">10,487</b></font></td>
    <td WIDTH="3%" VALIGN="TOP" HEIGHT="19"></td>
    <td WIDTH="19%" VALIGN="TOP" HEIGHT="19"><font SIZE="3"><b><p ALIGN="RIGHT">(18,262) </b></font></td>
  </tr>
  <tr>
    <td WIDTH="60%" VALIGN="TOP"><font SIZE="3"><b>Discontinued operations</b></font></td>
    <td WIDTH="18%" VALIGN="TOP"><font SIZE="3"><b><p ALIGN="RIGHT">(3,207)</b></font></td>
    <td WIDTH="3%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="TOP"><font SIZE="3"><b><p ALIGN="RIGHT">5,678</b></font></td>
  </tr>
  <tr>
    <td WIDTH="60%" VALIGN="TOP"><font SIZE="3"><b>Income taxes</b></font></td>
    <td WIDTH="18%" VALIGN="top" style="border-bottom: thin solid"><font SIZE="3"><b><p
    align="right">0 </b></font></td>
    <td WIDTH="3%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="top" style="border-bottom: thin solid"><font SIZE="3"><b><p
    align="right">0 </b></font></td>
  </tr>
  <tr>
    <td WIDTH="60%" VALIGN="TOP"><font SIZE="3"><b>Net income (loss)</b></font></td>
    <td WIDTH="18%" VALIGN="top" style="border-bottom: thin solid"><font SIZE="3"><b><p
    ALIGN="RIGHT">$ 7,280</b></font></td>
    <td WIDTH="3%" VALIGN="bottom" HEIGHT="42"></td>
    <td WIDTH="19%" VALIGN="top" style="border-bottom: thin solid"><font SIZE="3"><b><p
    ALIGN="RIGHT">$ (12,584)</b></font></td>
  </tr>
  <tr>
    <td WIDTH="60%" VALIGN="TOP"></td>
    <td WIDTH="18%" VALIGN="TOP"></td>
    <td WIDTH="3%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="60%" VALIGN="TOP"><font SIZE="3"><b>Net income (loss) per common share:<p>Basic
    and diluted</b></font></td>
    <td WIDTH="18%" VALIGN="bottom" style="border-bottom: thin solid"><font SIZE="3"><b><p
    ALIGN="RIGHT">$ 0.00</b></font></td>
    <td WIDTH="3%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="bottom" style="border-bottom: thin solid"><font SIZE="3"><b><p
    ALIGN="RIGHT">$ (0.00)</b></font></td>
  </tr>
  <tr>
    <td WIDTH="60%" VALIGN="TOP"></td>
    <td WIDTH="18%" VALIGN="TOP"></td>
    <td WIDTH="3%" VALIGN="bottom" HEIGHT="42"></td>
    <td WIDTH="19%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="60%" VALIGN="TOP"><font SIZE="3"><b>Weighted average common stock shares
    outstanding Basic and diluted</b></font></td>
    <td WIDTH="18%" VALIGN="bottom" style="border-bottom: thin solid"><font SIZE="3"><b><p
    ALIGN="RIGHT">4,997,400</b></font></td>
    <td WIDTH="3%" VALIGN="TOP"></td>
    <td WIDTH="19%" VALIGN="bottom" style="border-bottom: thin solid"><font SIZE="3"><b><p
    ALIGN="RIGHT">4,997,400</b></font></td>
  </tr>
</table>
<font SIZE="3"><b>

<p>See accompanying notes to condensed financial statements.</p>

<p align="center">- 5 -</p>

<p ALIGN="CENTER">PASW, INC.</p>

<p ALIGN="CENTER">CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)</p>

<p align="center">(Unaudited)</p>

<p>&nbsp;</p>
</b></font>

<table BORDER="0" CELLSPACING="0" CELLPADDING="7" WIDTH="571">
  <tr>
    <td WIDTH="65%" VALIGN="TOP"></td>
    <td WIDTH="35%" VALIGN="top" COLSPAN="3" style="border-bottom: thin solid"><font SIZE="3"><b><p
    ALIGN="CENTER">For the Three Months Ended </b></font></td>
  </tr>
  <tr>
    <td WIDTH="65%" VALIGN="TOP"></td>
    <td WIDTH="16%" VALIGN="top" style="border-bottom: thin solid"><font SIZE="3"><b><p
    ALIGN="CENTER">March 31,</p>
    <p ALIGN="CENTER">2003</b></font></td>
    <td WIDTH="3%" VALIGN="TOP"></td>
    <td WIDTH="16%" VALIGN="top" style="border-bottom: thin solid"><font SIZE="3"><b><p
    ALIGN="CENTER">March 31,</p>
    <p ALIGN="CENTER">2002</b></font></td>
  </tr>
  <tr>
    <td WIDTH="65%" VALIGN="TOP" HEIGHT="4"></td>
    <td WIDTH="16%" VALIGN="TOP" HEIGHT="4"></td>
    <td WIDTH="3%" VALIGN="TOP"></td>
    <td WIDTH="16%" VALIGN="TOP" HEIGHT="4"><font SIZE="3"><b><p ALIGN="CENTER">Restated</b></font></td>
  </tr>
  <tr>
    <td WIDTH="65%" VALIGN="TOP"><font SIZE="3"><b>Net income (loss)</b></font></td>
    <td WIDTH="16%" VALIGN="TOP"><font SIZE="3"><b><p ALIGN="RIGHT">$ 7,280</b></font></td>
    <td WIDTH="3%" VALIGN="TOP"></td>
    <td WIDTH="16%" VALIGN="TOP"><font SIZE="3"><b><p ALIGN="RIGHT">$ (12,584)</b></font></td>
  </tr>
  <tr>
    <td WIDTH="65%" VALIGN="TOP"><font SIZE="3"><b>Other comprehensive income (loss):</b></font></td>
    <td WIDTH="16%" VALIGN="TOP"></td>
    <td WIDTH="3%" VALIGN="TOP"></td>
    <td WIDTH="16%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="65%" VALIGN="TOP"></td>
    <td WIDTH="16%" VALIGN="TOP"></td>
    <td WIDTH="3%" VALIGN="TOP"></td>
    <td WIDTH="16%" VALIGN="TOP"></td>
  </tr>
  <tr>
    <td WIDTH="65%" VALIGN="TOP"><font SIZE="3"><b><p align="left">Foreign currency
    translation adjustment</b></font></td>
    <td WIDTH="16%" VALIGN="top" style="border-bottom: thin solid"><font SIZE="3"><b><p
    ALIGN="RIGHT">(5,379)</b></font></td>
    <td WIDTH="3%" VALIGN="TOP"></td>
    <td WIDTH="16%" VALIGN="top" style="border-bottom: thin solid"><font SIZE="3"><b><p
    ALIGN="RIGHT">(4,921)</b></font></td>
  </tr>
  <tr>
    <td WIDTH="65%" VALIGN="TOP"><font SIZE="3"><b>Comprehensive income (loss)</b></font></td>
    <td WIDTH="16%" VALIGN="top" style="border-bottom: thin solid"><font SIZE="3"><b><p
    ALIGN="RIGHT">$ 1,901</b></font></td>
    <td WIDTH="3%" VALIGN="TOP"></td>
    <td WIDTH="16%" VALIGN="top" style="border-bottom: thin solid"><font SIZE="3"><b>$
    (17,505)</b></font></td>
  </tr>
</table>
<font SIZE="3"><b>

<p>&nbsp;</p>

<p ALIGN="center">- 6 -</p>

<p ALIGN="CENTER">PASW, INC.</p>

<p ALIGN="CENTER">CONSOLIDATED STATEMENTS OF CASH FLOWS</p>

<blockquote>
  <blockquote>
    <blockquote>
      <blockquote>
        <blockquote>
          <blockquote>
            <blockquote>
              <blockquote>
                <blockquote>
                  <blockquote>
                    <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (Unaudited)</p>
                  </blockquote>
                </blockquote>
              </blockquote>
            </blockquote>
          </blockquote>
        </blockquote>
      </blockquote>
    </blockquote>
  </blockquote>
</blockquote>
</b></font>

<table BORDER="0" CELLSPACING="0" CELLPADDING="7" WIDTH="625" height="1121">
  <tr>
    <td WIDTH="62%" VALIGN="TOP" height="22"></td>
    <td WIDTH="38%" VALIGN="top" COLSPAN="3" style="border-bottom: thin solid" height="22"><font
    SIZE="3"><b><p ALIGN="CENTER">For the Three Months Ended </b></font></td>
  </tr>
  <tr>
    <td WIDTH="62%" VALIGN="TOP" height="60"></td>
    <td WIDTH="18%" VALIGN="top" style="border-bottom: thin solid" height="60"><font SIZE="3"><b><p
    ALIGN="CENTER">March 31,</p>
    <p ALIGN="CENTER">2003</b></font></td>
    <td WIDTH="3%" VALIGN="TOP" height="60"></td>
    <td WIDTH="17%" VALIGN="top" style="border-bottom: thin solid" height="60"><font SIZE="3"><b><p
    ALIGN="CENTER">March 31,</p>
    <p ALIGN="CENTER">2002</b></font></td>
  </tr>
  <tr>
    <td WIDTH="62%" VALIGN="TOP" height="59"><font SIZE="3"><b>Cash flows from operating
    activities:<p>Continuing operations</b></font></td>
    <td WIDTH="18%" VALIGN="TOP" height="59"></td>
    <td WIDTH="3%" VALIGN="TOP" height="59"></td>
    <td WIDTH="17%" VALIGN="TOP" height="59"><font SIZE="3"><b><p ALIGN="CENTER">Restated</b></font></td>
  </tr>
  <tr>
    <td WIDTH="62%" VALIGN="TOP" height="21"><font SIZE="3"><b>Net income (loss)</b></font></td>
    <td WIDTH="18%" VALIGN="TOP" height="21"><font SIZE="3"><b><p ALIGN="RIGHT">$ 10,487</b></font></td>
    <td WIDTH="3%" VALIGN="TOP" height="21"></td>
    <td WIDTH="17%" VALIGN="TOP" height="21"><font SIZE="3"><b><p ALIGN="RIGHT">$ (18,262)</b></font></td>
  </tr>
  <tr>
    <td WIDTH="62%" VALIGN="TOP" height="40"><font SIZE="3"><b>Adjustments to reconcile net
    loss to net cash used in operating activities:</b></font></td>
    <td WIDTH="18%" VALIGN="TOP" height="40"></td>
    <td WIDTH="3%" VALIGN="TOP" height="40"></td>
    <td WIDTH="17%" VALIGN="TOP" height="40"></td>
  </tr>
  <tr>
    <td WIDTH="62%" VALIGN="TOP" height="21"><font SIZE="3"><b>Depreciation and amortization</b></font></td>
    <td WIDTH="18%" VALIGN="TOP" height="21"><p align="right"><strong>0</strong></td>
    <td WIDTH="3%" VALIGN="TOP" height="21"></td>
    <td WIDTH="17%" VALIGN="TOP" height="21"><font SIZE="3"><b><p ALIGN="RIGHT">800</b></font></td>
  </tr>
  <tr>
    <td WIDTH="62%" VALIGN="TOP" height="21"><font SIZE="3"><b>(Increase) decrease in assets:</b></font></td>
    <td WIDTH="18%" VALIGN="TOP" height="21"></td>
    <td WIDTH="3%" VALIGN="TOP" height="21"></td>
    <td WIDTH="17%" VALIGN="TOP" height="21"></td>
  </tr>
  <tr>
    <td WIDTH="62%" VALIGN="TOP" height="21"><font SIZE="3"><b>Accounts receivable</b></font></td>
    <td WIDTH="18%" VALIGN="TOP" height="21"><font SIZE="3"><b><p ALIGN="RIGHT">21,803</b></font></td>
    <td WIDTH="3%" VALIGN="TOP" height="21"></td>
    <td WIDTH="17%" VALIGN="TOP" height="21"><font SIZE="3"><b><p ALIGN="RIGHT">31,627</b></font></td>
  </tr>
  <tr>
    <td WIDTH="62%" VALIGN="TOP" height="21"><font SIZE="3"><b>Prepaid expenses</b></font></td>
    <td WIDTH="18%" VALIGN="TOP" height="21"><font SIZE="3"><b><p ALIGN="RIGHT">66</b></font></td>
    <td WIDTH="3%" VALIGN="TOP" height="21"></td>
    <td WIDTH="17%" VALIGN="TOP" height="21"><p align="right"><strong>0</strong></td>
  </tr>
  <tr>
    <td WIDTH="62%" VALIGN="TOP" height="21"><font SIZE="3"><b>Sale of fixed assets &#150; net
    of depreciation of $449</b></font></td>
    <td WIDTH="18%" VALIGN="TOP" height="21"><font SIZE="3"><b><p ALIGN="RIGHT">4,242</b></font></td>
    <td WIDTH="3%" VALIGN="TOP" height="21"></td>
    <td WIDTH="17%" VALIGN="TOP" height="21"><p align="right"><strong>0</strong></td>
  </tr>
  <tr>
    <td WIDTH="62%" VALIGN="TOP" height="21"><font SIZE="3"><b>Increase (decrease) in
    liabilities:</b></font></td>
    <td WIDTH="18%" VALIGN="TOP" height="21"></td>
    <td WIDTH="3%" VALIGN="TOP" height="21"></td>
    <td WIDTH="17%" VALIGN="TOP" height="21"></td>
  </tr>
  <tr>
    <td WIDTH="62%" VALIGN="TOP" height="22"><font SIZE="3"><b>Accounts payable and accrued
    expenses</b></font></td>
    <td WIDTH="18%" VALIGN="top" style="border-bottom: thin solid" height="22"><font SIZE="3"><b><p
    ALIGN="RIGHT">(27,240)</b></font></td>
    <td WIDTH="3%" VALIGN="TOP" height="22"></td>
    <td WIDTH="17%" VALIGN="top" style="border-bottom: thin solid" height="22"><font SIZE="3"><b><p
    ALIGN="RIGHT">69,941</b></font></td>
  </tr>
  <tr>
    <td WIDTH="62%" VALIGN="TOP" height="21"></td>
    <td WIDTH="18%" VALIGN="TOP" height="21"><font SIZE="3"><b><p ALIGN="RIGHT">9,358</b></font></td>
    <td WIDTH="3%" VALIGN="TOP" height="21"></td>
    <td WIDTH="17%" VALIGN="TOP" height="21"><font SIZE="3"><b><p ALIGN="RIGHT">84,106</b></font></td>
  </tr>
  <tr>
    <td WIDTH="62%" VALIGN="TOP" height="22"><font SIZE="3"><b>Gain (loss) from discontinued
    operations</b></font></td>
    <td WIDTH="18%" VALIGN="top" style="border-bottom: thin solid" height="22"><font SIZE="3"><b><p
    ALIGN="RIGHT">(3,207) </b></font></td>
    <td WIDTH="3%" VALIGN="TOP" height="22"></td>
    <td WIDTH="17%" VALIGN="top" style="border-bottom: thin solid" height="22"><font SIZE="3"><b><p
    ALIGN="RIGHT">5,678 </b></font></td>
  </tr>
  <tr>
    <td WIDTH="62%" VALIGN="TOP" height="22"><font SIZE="3"><b>Net cash used in operating
    activities </b></font></td>
    <td WIDTH="18%" VALIGN="top" style="border-bottom: thin solid" height="22"><font SIZE="3"><b><p
    ALIGN="RIGHT">6,151</b></font></td>
    <td WIDTH="3%" VALIGN="TOP" height="22"></td>
    <td WIDTH="17%" VALIGN="top" style="border-bottom: thin solid" height="22"><font SIZE="3"><b><p
    ALIGN="RIGHT">89,784</b></font></td>
  </tr>
  <tr>
    <td WIDTH="62%" VALIGN="TOP" height="21"></td>
    <td WIDTH="18%" VALIGN="TOP" height="21"></td>
    <td WIDTH="3%" VALIGN="TOP" height="21"></td>
    <td WIDTH="17%" VALIGN="TOP" height="21"></td>
  </tr>
  <tr>
    <td WIDTH="62%" VALIGN="TOP" height="22"><font SIZE="3"><b>Cash flows from investing
    activities:</b></font></td>
    <td WIDTH="18%" VALIGN="top" style="border-bottom: thin solid" height="22"><font SIZE="3"><b><p
    ALIGN="RIGHT">0</b></font></td>
    <td WIDTH="3%" VALIGN="TOP" height="22"></td>
    <td WIDTH="17%" VALIGN="top" style="border-bottom: thin solid" height="22"><font SIZE="3"><b><p
    ALIGN="RIGHT">0</b></font></td>
  </tr>
  <tr>
    <td WIDTH="62%" VALIGN="TOP" height="22"><font SIZE="3"><b>Net cash from (used) in
    investing activities</b></font></td>
    <td WIDTH="18%" VALIGN="top" style="border-bottom: thin solid" height="22"><font SIZE="3"><b><p
    ALIGN="RIGHT">0</b></font></td>
    <td WIDTH="3%" VALIGN="TOP" height="22"></td>
    <td WIDTH="17%" VALIGN="top" style="border-bottom: thin solid" height="22"><font SIZE="3"><b><p
    ALIGN="RIGHT">0</b></font></td>
  </tr>
  <tr>
    <td WIDTH="62%" VALIGN="TOP" height="21"></td>
    <td WIDTH="18%" VALIGN="TOP" height="21"></td>
    <td WIDTH="3%" VALIGN="TOP" height="21"></td>
    <td WIDTH="17%" VALIGN="TOP" height="21"></td>
  </tr>
  <tr>
    <td WIDTH="62%" VALIGN="TOP" height="22"><font SIZE="3"><b>Cash flows from financing
    activities</b></font></td>
    <td WIDTH="18%" VALIGN="top" style="border-bottom: thin solid" height="22"><font SIZE="3"><b><p
    ALIGN="RIGHT">0</b></font></td>
    <td WIDTH="3%" VALIGN="TOP" height="22"></td>
    <td WIDTH="17%" VALIGN="top" style="border-bottom: thin solid" height="22"><font SIZE="3"><b><p
    ALIGN="RIGHT">0</b></font></td>
  </tr>
  <tr>
    <td WIDTH="62%" VALIGN="TOP" height="22"><font SIZE="3"><b>Net cash provided by financing
    activities</b></font></td>
    <td WIDTH="18%" VALIGN="top" style="border-bottom: thin solid" height="22"><font SIZE="3"><b><p
    ALIGN="RIGHT">0</b></font></td>
    <td WIDTH="3%" VALIGN="TOP" height="22"></td>
    <td WIDTH="17%" VALIGN="top" style="border-bottom: thin solid" height="22"><font SIZE="3"><b><p
    ALIGN="RIGHT">0</b></font></td>
  </tr>
  <tr>
    <td WIDTH="62%" VALIGN="TOP" height="21"></td>
    <td WIDTH="18%" VALIGN="TOP" height="21"></td>
    <td WIDTH="3%" VALIGN="TOP" height="21"></td>
    <td WIDTH="17%" VALIGN="TOP" height="21"></td>
  </tr>
  <tr>
    <td WIDTH="62%" VALIGN="TOP" height="22"><font SIZE="3"><b>Effect of exchange rate changes
    on cash</b></font></td>
    <td WIDTH="18%" VALIGN="top" style="border-bottom: thin solid" height="22"><font SIZE="3"><b><p
    ALIGN="RIGHT">(5,735)</b></font></td>
    <td WIDTH="3%" VALIGN="TOP" height="22"></td>
    <td WIDTH="17%" VALIGN="top" style="border-bottom: thin solid" height="22"><font SIZE="3"><b><p
    ALIGN="RIGHT">(4,790)</b></font></td>
  </tr>
  <tr>
    <td WIDTH="62%" VALIGN="TOP" height="20"></td>
    <td WIDTH="18%" VALIGN="TOP" height="20"></td>
    <td WIDTH="3%" VALIGN="TOP" height="20"></td>
    <td WIDTH="17%" VALIGN="TOP" height="20"></td>
  </tr>
  <tr>
    <td WIDTH="62%" VALIGN="TOP" height="21"><font SIZE="3"><b>Net increase (decrease) in cash</b></font></td>
    <td WIDTH="18%" VALIGN="TOP" height="21"><font SIZE="3"><b><p ALIGN="RIGHT">416</b></font></td>
    <td WIDTH="3%" VALIGN="TOP" height="21"></td>
    <td WIDTH="17%" VALIGN="TOP" height="21"><font SIZE="3"><b><p ALIGN="RIGHT">84,994</b></font></td>
  </tr>
  <tr>
    <td WIDTH="62%" VALIGN="TOP" height="21"></td>
    <td WIDTH="18%" VALIGN="TOP" height="21"></td>
    <td WIDTH="3%" VALIGN="TOP" height="21"></td>
    <td WIDTH="17%" VALIGN="TOP" height="21"></td>
  </tr>
  <tr>
    <td WIDTH="62%" VALIGN="TOP" height="22"><font SIZE="3"><b>Cash &#150; Beginning</b></font></td>
    <td WIDTH="18%" VALIGN="top" style="border-bottom: thin solid" height="22"><font SIZE="3"><b><p
    ALIGN="RIGHT">98,901</b></font></td>
    <td WIDTH="3%" VALIGN="TOP" height="20"></td>
    <td WIDTH="17%" VALIGN="top" style="border-bottom: thin solid" height="22"><font SIZE="3"><b><p
    ALIGN="RIGHT">152,148</b></font></td>
  </tr>
  <tr>
    <td WIDTH="62%" VALIGN="TOP" height="22"><font SIZE="3"><b>Cash &#150; Ending</b></font></td>
    <td WIDTH="18%" VALIGN="top" style="border-bottom: thin solid" height="22"><font SIZE="3"><b><p
    ALIGN="RIGHT">$ 99,317</b></font></td>
    <td WIDTH="3%" VALIGN="TOP" height="21"></td>
    <td WIDTH="17%" VALIGN="top" style="border-bottom: thin solid" height="22"><font SIZE="3"><b><p
    ALIGN="RIGHT">$ 237,142</b></font></td>
  </tr>
  <tr>
    <td WIDTH="62%" VALIGN="TOP" height="21"></td>
    <td WIDTH="18%" VALIGN="TOP" height="21"></td>
    <td WIDTH="3%" VALIGN="TOP" height="21"></td>
    <td WIDTH="17%" VALIGN="TOP" height="21"></td>
  </tr>
</table>
<b><font SIZE="3">

<p>Supplemental non-cash financing activities: None</p>

<p>See accompanying notes to condensed financial statements.</p>
</font><font FACE="Courier New" SIZE="3">

<p>&nbsp;</p>

<p>&nbsp;</p>
</font><font SIZE="3">

<p ALIGN="center">- 7 -</p>

<p ALIGN="CENTER">PASW, INC.</p>

<p ALIGN="CENTER">NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</p>

<p ALIGN="CENTER">(UNAUDITED)</p>

<blockquote>
  <p ALIGN="JUSTIFY">(1) Basis of presentation</p>
</blockquote>
</b>

<p ALIGN="JUSTIFY">The accompanying unaudited consolidated financial statements of PASW,
INC. (&quot;PASW&quot;, or the &quot;Company&quot;) have been prepared in accordance with
generally accepted accounting principles for interim financial information and the
instructions to Form 10-QSB. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments (consisting of only normal
recurring accruals) considered necessary for a fair presentation of the Company&#146;s
financial position at March 31, 2003, the results of operations for the three ended March
31, 2003 and March 31, 2002, and the cash flows for the three months ended March 31, 2003
and March 31, 2002 are included. Operating results for the three-months ended March 31,
2003 are not necessarily indicative of the results that may be expected for the year
ending December 31, 2003.</p>

<p ALIGN="JUSTIFY">The information contained in this Form 10-QSB should be read in
conjunction with audited financial statements and related notes for the year ended
December 31, 2002 which are contained in the Company&#146;s Annual Report on Form 10-KSB
filed with the Securities and Exchange Commission (the &quot;SEC&quot;) on March 31, 2003,
and the Company&#146;s Registration Statement on Form SB-2 filed with the Securities and
Exchange Commission on July 29, 1999 (File 333-75137).</p>
<b>

<blockquote>
  <p ALIGN="JUSTIFY">(2) Earnings per share</p>
</blockquote>
</b>

<p ALIGN="JUSTIFY">The Company adopted SFAS No. 128, &quot;Earnings Per Share&quot;,
during 1998. SFAS No. 128 requires presentation of basic and diluted earnings per share.
Basic earnings per share is computed by dividing income available to common stockholders
by the weighted average number of common shares outstanding for the reporting period.
Diluted earnings per share reflects the potential dilution that could occur if securities
or other contracts, such as stock options, to issue common stock were exercised or
converted into common stock. All prior period weighted average and per share information
has been restated in accordance with SFAS No. 128.</p>
<b>

<p ALIGN="CENTER">&nbsp;</p>

<p ALIGN="CENTER">COMPUTATION OF WEIGHTED AVERAGE</p>

<p ALIGN="CENTER">COMMON SHARES OUTSTANDING</p>
</b></font>

<table BORDER="0" CELLSPACING="0" CELLPADDING="7" WIDTH="607">
  <tr>
    <td WIDTH="252" VALIGN="TOP"></td>
    <td WIDTH="57" VALIGN="BOTTOM"><font SIZE="3"><b><p ALIGN="CENTER">Total Number of Shares</b></font></td>
    <td WIDTH="1" VALIGN="TOP"></td>
    <td WIDTH="49" VALIGN="TOP"><font SIZE="3"><b><p ALIGN="CENTER">Three Months Ended </p>
    <p ALIGN="CENTER">March 31, 2003</b></font></td>
  </tr>
  <tr>
    <td WIDTH="252" VALIGN="TOP"><font SIZE="3"><b>Outstanding shares as of January 1, 2003</b></font></td>
    <td WIDTH="57" VALIGN="TOP"><font SIZE="3"><b><p ALIGN="RIGHT">4,997,400</b></font></td>
    <td WIDTH="1" VALIGN="TOP"></td>
    <td WIDTH="49" VALIGN="TOP"><font SIZE="3"><b><p ALIGN="RIGHT">4,997,400</b></font></td>
  </tr>
  <tr>
    <td WIDTH="252" VALIGN="TOP" HEIGHT="22"><font SIZE="3"><b>Options treated as Common Stock</b></font></td>
    <td WIDTH="57" VALIGN="top" HEIGHT="22" style="border-bottom: thin solid"><font SIZE="3"><b><p
    ALIGN="RIGHT">1,142,674</b></font></td>
    <td WIDTH="1" VALIGN="TOP"></td>
    <td WIDTH="49" VALIGN="top" HEIGHT="22" style="border-bottom: thin solid"><font SIZE="3"><b><p
    ALIGN="RIGHT">1,142,674</b></font></td>
  </tr>
  <tr>
    <td WIDTH="252" VALIGN="TOP"><b><font SIZE="3">Total weighted average</font> <font
    SIZE="3">shares outstanding</font></b></td>
    <td WIDTH="57" VALIGN="top" style="border-bottom: thin solid"><font SIZE="3"><b><p
    ALIGN="RIGHT">6,140,074</b></font></td>
    <td WIDTH="1" VALIGN="TOP"></td>
    <td WIDTH="49" VALIGN="top" style="border-bottom: thin solid"><font SIZE="3"><b><p
    ALIGN="RIGHT">6,140,074</b></font></td>
  </tr>
  <tr>
    <td WIDTH="252" VALIGN="TOP"><font SIZE="3"><b>Net income</b></font></td>
    <td WIDTH="57" VALIGN="TOP"></td>
    <td WIDTH="1" VALIGN="TOP"></td>
    <td WIDTH="49" VALIGN="top" style="border-bottom: thin solid"><font SIZE="3"><b><p
    ALIGN="RIGHT">$ 7,280</b></font></td>
  </tr>
  <tr>
    <td WIDTH="252" VALIGN="TOP"><font SIZE="3"><b>Net gain (loss) per common share basic and
    diluted</b></font></td>
    <td WIDTH="57" VALIGN="TOP"></td>
    <td WIDTH="1" VALIGN="TOP"></td>
    <td WIDTH="49" VALIGN="top" style="border-bottom: thin solid"><font SIZE="3"><b><p
    ALIGN="RIGHT">$ 0.00 </b></font></td>
  </tr>
</table>
<font SIZE="3"><b>

<p ALIGN="center">- 8 -</p>

<blockquote>
  <p ALIGN="JUSTIFY">(3) Sale of Network Research Corporation &#150; Japan Distribution
  Business (&quot;NRCJ&quot;)</p>
</blockquote>
</b>

<p>Our NRCJ subsidiary is a distributor for products supplied by Net Silicon, Inc. Revenue
from licenses of the suite of Internet and Web products and sales of services accounted
for the major portion of its revenue in the years ended December 31, 2002. In July 2002
Net Silicon, Inc. ceased producing products used by NRCJ. During the remainder of 2002 the
sales of licenses of the subsidiary decreased to a point where operations became
unprofitable. On January 31, 2003 the Company sold the operating assets and certain
liabilities of the NRCJ distribution business to Network Technology, Inc., a new company
formed by the former employees of NRCJ, for 1.0 million Japanese Yen (US $8,400). NRCJ
will continue to receive royalty income from former NRCJ customers. The Company will
account for this transaction as a discontinued operation in 2003.</p>
<b>

<blockquote>
  <p>(4) Change of Accountants</p>
</blockquote>

<p></b>The Company has used the services of Merdinger, Fruchter, Rosen &amp; Co.
(&quot;MFRC&quot;) as its independent accountant since 1996. In January 2003 the Company
was informed by MRFC that it was exiting the business of auditing publicly traded
companies. The Company has selected Skeehan and Company as its new auditor effective
February 27, 2003. The Company&#146;s Board of Directors recommended and approved the
change in the Company&#146;s certifying accountants. </p>
<b>

<p ALIGN="JUSTIFY">&nbsp;</p>

<p ALIGN="JUSTIFY">ITEM 2. MANAGEMENT&#146;S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION</p>

<p ALIGN="JUSTIFY">AND RESULTS OF OPERATIONS.</p>

<p ALIGN="JUSTIFY">Cautionary Note Regarding Forward-Looking Statements</p>

<p ALIGN="JUSTIFY"></b>Except for historical information contained herein, the statements
in this report (including without limitation, statements indicating that the Company
&quot;expects,&quot; &quot;estimates,&quot; anticipates,&quot; or &quot;believes&quot; and
all other statements concerning future financial results, product offerings, proposed
acquisitions or combinations or other events that have not yet occurred) are
forward-looking statements that are made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995, Section 21E of the Securities Exchange
Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended.</p>

<p ALIGN="JUSTIFY">Forward-looking statements involve known and unknown factors, risks and
uncertainties, which may cause the Company&#146;s actual results in future periods to
differ materially from forecasted results. Those factors, risks and uncertainties include,
but are not limited to; the consummation of possible acquisitions or combinations; and the
Company&#146;s ability to integrate acquired or combined operations with its existing
business and otherwise manage growth; and the Company&#146;s ability to generate or obtain
additional capital resources to fund its operations and growth. </p>

<p ALIGN="JUSTIFY">Additional information on these and other risk factors are included in
the &quot;Factors That May Affect Future Results&quot; section in the Company&#146;s
Annual Report on Form 10-KSB filed with the SEC on March 31, 2003, Readers are cautioned
not to place undue reliance on these forward-looking statements, which reflect
management&#146;s analysis, judgement, belief and expectations only as of the date hereof.
PASW undertakes no obligation to publicly revise these forward-looking statements to
reflect events or circumstances that arise after the date hereof.</p>

<p ALIGN="center"><strong>- 9 -</strong></p>

<p ALIGN="JUSTIFY"><b>General</p>
</b></font>

<p ALIGN="JUSTIFY"><font SIZE="3">PASW, Inc., formerly Pacific Softworks, Inc.,
incorporated in California in November 1992, has historically developed and licensed
Internet and Web related software and software development tools that enable
communications, based on a set of rules known as protocols. The Company&#146;s products
were embedded into systems and developed or manufactured by others. In August 2000, the
Company sold all of the assets of its Internet and Web operations. Since that time, the
Company&#146;s operations, consisting of sales of software and licenses, have been
conducted principally through an administrative office in Northern California and, until
January 2003, a sales office in Japan. Since January 2003 the Company has maintained an
administrative function in Japan.</p>
</font>

<p ALIGN="JUSTIFY"><font SIZE="3">The Company operates in one business segment. The
Company&#146;s fiscal year ends on December 31</p>

<p ALIGN="center">&nbsp;</p>

<p ALIGN="center"><strong>- 10 -</strong></p>
<b>

<p ALIGN="JUSTIFY">Results of Operations </p>
</b>

<p ALIGN="JUSTIFY">The following table sets forth, for the periods indicated, the
percentage relationship to net revenue of certain items in the consolidated statements of
operations and comprehensive income</p>
</font><div align="center"><center>

<table CELLSPACING="0" BORDER="0" CELLPADDING="7" WIDTH="615">
  <tr>
    <td WIDTH="39%" VALIGN="TOP" HEIGHT="26"></td>
    <td WIDTH="31%" VALIGN="BOTTOM" COLSPAN="2" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER"><strong>Unaudited</strong></font></td>
    <td WIDTH="30%" VALIGN="BOTTOM" COLSPAN="2" HEIGHT="26"></td>
  </tr>
  <tr>
    <td WIDTH="39%" VALIGN="TOP" HEIGHT="37"></td>
    <td WIDTH="31%" VALIGN="BOTTOM" COLSPAN="2" HEIGHT="37"><font SIZE="3"><p ALIGN="CENTER"><strong>For
    the Three Months Ended March 31,</strong></font></td>
    <td WIDTH="30%" VALIGN="BOTTOM" COLSPAN="2" HEIGHT="37"></td>
  </tr>
  <tr>
    <td WIDTH="39%" VALIGN="TOP" HEIGHT="9"></td>
    <td WIDTH="16%" VALIGN="TOP" HEIGHT="9"><font SIZE="3"><u><p ALIGN="CENTER"><strong>2003</strong></u></font></td>
    <td WIDTH="16%" VALIGN="TOP" HEIGHT="9"><font SIZE="3"><u><p ALIGN="CENTER"><strong>2002</strong></u></font></td>
    <td WIDTH="15%" VALIGN="TOP" HEIGHT="9"></td>
    <td WIDTH="15%" VALIGN="TOP" HEIGHT="9"></td>
  </tr>
  <tr>
    <td WIDTH="39%" VALIGN="TOP" HEIGHT="4"><font SIZE="3"><p ALIGN="JUSTIFY">&nbsp;</p>
    <p ALIGN="JUSTIFY">Net revenue</font></td>
    <td WIDTH="16%" VALIGN="bottom" HEIGHT="4"><font SIZE="3"><p ALIGN="center">100.00%&nbsp;</font></td>
    <td WIDTH="16%" VALIGN="bottom" HEIGHT="4"><font SIZE="3"><u><p ALIGN="JUSTIFY">Restated</p>
    </u><p ALIGN="center">100.00%&nbsp;</font></td>
    <td WIDTH="15%" VALIGN="TOP" HEIGHT="4"></td>
    <td WIDTH="15%" VALIGN="BOTTOM" HEIGHT="4"></td>
  </tr>
  <tr>
    <td WIDTH="39%" VALIGN="TOP" HEIGHT="4"><font SIZE="3"><p ALIGN="JUSTIFY">Cost of revenue</font></td>
    <td WIDTH="16%" VALIGN="bottom" HEIGHT="4"><font SIZE="3"><u><p ALIGN="center">0.00</u></font></td>
    <td WIDTH="16%" VALIGN="bottom" HEIGHT="4" align="center"><font SIZE="3"><u><p
    ALIGN="center">0.00</u></font></td>
    <td WIDTH="15%" VALIGN="TOP" HEIGHT="4"></td>
    <td WIDTH="15%" VALIGN="BOTTOM" HEIGHT="4"></td>
  </tr>
  <tr>
    <td WIDTH="39%" VALIGN="TOP" HEIGHT="4"><font SIZE="3"><p ALIGN="JUSTIFY">Gross profit</font></td>
    <td WIDTH="16%" VALIGN="bottom" HEIGHT="4"><font SIZE="3"><u><p ALIGN="center">100.00</u></font></td>
    <td WIDTH="16%" VALIGN="bottom" HEIGHT="4" align="center"><font SIZE="3"><u><p
    ALIGN="center">100,00&nbsp;</u></font></td>
    <td WIDTH="15%" VALIGN="TOP" HEIGHT="4"></td>
    <td WIDTH="15%" VALIGN="BOTTOM" HEIGHT="4"></td>
  </tr>
  <tr>
    <td WIDTH="39%" VALIGN="TOP" HEIGHT="4"><font SIZE="3"><p ALIGN="JUSTIFY">Selling, general
    and administrative</font></td>
    <td WIDTH="16%" VALIGN="bottom" HEIGHT="4"><font SIZE="3"><p ALIGN="center">87.49</font></td>
    <td WIDTH="16%" VALIGN="bottom" HEIGHT="4" align="center"><font SIZE="3"><p
    ALIGN="JUSTIFY">&nbsp;</p>
    <p ALIGN="center">147.87</font></td>
    <td WIDTH="15%" VALIGN="TOP" HEIGHT="4"></td>
    <td WIDTH="15%" VALIGN="BOTTOM" HEIGHT="4"></td>
  </tr>
  <tr>
    <td WIDTH="39%" VALIGN="TOP" HEIGHT="4"><font SIZE="3"><p ALIGN="JUSTIFY">Research and
    development</font></td>
    <td WIDTH="16%" VALIGN="bottom" HEIGHT="4"><font SIZE="3"><p ALIGN="center">0.00&nbsp;</font></td>
    <td WIDTH="16%" VALIGN="bottom" HEIGHT="4" align="center"><font SIZE="3"><p ALIGN="center">0.00</font></td>
    <td WIDTH="15%" VALIGN="TOP" HEIGHT="4"></td>
    <td WIDTH="15%" VALIGN="BOTTOM" HEIGHT="4"></td>
  </tr>
  <tr>
    <td WIDTH="39%" VALIGN="TOP" HEIGHT="4"><font SIZE="3"><p ALIGN="JUSTIFY">Depreciation and
    </p>
    <p ALIGN="JUSTIFY">Amortization</font></td>
    <td WIDTH="16%" VALIGN="bottom" HEIGHT="4"><font SIZE="3"><u><p ALIGN="center">0.00</u></font></td>
    <td WIDTH="16%" VALIGN="bottom" HEIGHT="4" align="center"><font SIZE="3"><u><p
    ALIGN="center">2.19&nbsp;</u></font></td>
    <td WIDTH="15%" VALIGN="TOP" HEIGHT="4"></td>
    <td WIDTH="15%" VALIGN="BOTTOM" HEIGHT="4"></td>
  </tr>
  <tr>
    <td WIDTH="39%" VALIGN="TOP" HEIGHT="4"><font SIZE="3"><p ALIGN="JUSTIFY">Total expenses</font></td>
    <td WIDTH="16%" VALIGN="bottom" HEIGHT="4"><font SIZE="3"><u><p ALIGN="center">87.49</u></font></td>
    <td WIDTH="16%" VALIGN="bottom" HEIGHT="4" align="center"><font SIZE="3"><u><p
    ALIGN="center">150.06&nbsp;</u></font></td>
    <td WIDTH="15%" VALIGN="BOTTOM" HEIGHT="4"></td>
    <td WIDTH="15%" VALIGN="BOTTOM" HEIGHT="4"></td>
  </tr>
  <tr>
    <td WIDTH="39%" VALIGN="TOP" HEIGHT="5"><font SIZE="3"><p ALIGN="JUSTIFY">Other income:</p>
    <p ALIGN="JUSTIFY">Gain in sale of fixed assets</font></td>
    <td WIDTH="16%" VALIGN="bottom" HEIGHT="5"><font SIZE="3"><u><p ALIGN="center">9.88</u></font></td>
    <td WIDTH="16%" VALIGN="bottom" HEIGHT="5" align="center"><u>&nbsp;&nbsp;&nbsp; 0
    &nbsp;&nbsp;&nbsp; </u></td>
    <td WIDTH="15%" VALIGN="TOP" HEIGHT="5"></td>
    <td WIDTH="15%" VALIGN="BOTTOM" HEIGHT="5"></td>
  </tr>
  <tr>
    <td WIDTH="39%" VALIGN="TOP" HEIGHT="4"><font SIZE="3"><p ALIGN="JUSTIFY">Net gain (loss)
    from </p>
    <p ALIGN="JUSTIFY">Operations</font></td>
    <td WIDTH="16%" VALIGN="bottom" HEIGHT="4"><font SIZE="3"><p ALIGN="center">22.39</font></td>
    <td WIDTH="16%" VALIGN="bottom" HEIGHT="4" align="center"><font SIZE="3"><p ALIGN="center">(50.06)</font></td>
    <td WIDTH="15%" VALIGN="TOP" HEIGHT="4"></td>
    <td WIDTH="15%" VALIGN="BOTTOM" HEIGHT="4"></td>
  </tr>
  <tr>
    <td WIDTH="39%" VALIGN="TOP" HEIGHT="5"><font SIZE="3"><p ALIGN="JUSTIFY">Gain (loss) from
    discontinued</p>
    <p ALIGN="JUSTIFY">Operations</font></td>
    <td WIDTH="16%" VALIGN="bottom" HEIGHT="5"><font SIZE="3"><u><p ALIGN="center">(6.85)&nbsp;</u></font></td>
    <td WIDTH="16%" VALIGN="bottom" HEIGHT="5" align="center"><font SIZE="3"><u><p
    ALIGN="center">15.56&nbsp;</u></font></td>
    <td WIDTH="15%" VALIGN="BOTTOM" HEIGHT="5"></td>
    <td WIDTH="15%" VALIGN="BOTTOM" HEIGHT="5"></td>
  </tr>
  <tr>
    <td WIDTH="39%" VALIGN="TOP" HEIGHT="4"><font SIZE="3"><p ALIGN="JUSTIFY">Net income
    (loss)</font></td>
    <td WIDTH="16%" VALIGN="bottom" HEIGHT="4"><font SIZE="3"><u><p ALIGN="center">15.54%</u></font></td>
    <td WIDTH="16%" VALIGN="bottom" HEIGHT="4" align="center"><font SIZE="3"><u><p
    ALIGN="center">(34.50)%</u></font></td>
    <td WIDTH="15%" VALIGN="TOP" HEIGHT="4"></td>
    <td WIDTH="15%" VALIGN="BOTTOM" HEIGHT="4"></td>
  </tr>
</table>
</center></div><font SIZE="3">

<p ALIGN="JUSTIFY">The following table sets forth, for the periods indicated, the
percentage of net revenue by principal geographic area to total revenue:</p>
</font><div align="center"><center>

<table CELLSPACING="0" BORDER="0" CELLPADDING="7" WIDTH="531">
  <tr>
    <td WIDTH="187" VALIGN="TOP" COLSPAN="2" HEIGHT="24"></td>
    <td WIDTH="316" VALIGN="BOTTOM" COLSPAN="4" HEIGHT="24"><font SIZE="3"><p ALIGN="CENTER"><strong>Unaudited</strong></font></td>
  </tr>
  <tr>
    <td WIDTH="174" VALIGN="TOP" HEIGHT="26"></td>
    <td WIDTH="329" VALIGN="BOTTOM" COLSPAN="5" HEIGHT="26"><font SIZE="3"><p ALIGN="CENTER"><strong>For
    the Three Months Ended March 31,</strong></font></td>
  </tr>
  <tr>
    <td WIDTH="198" VALIGN="TOP" COLSPAN="4" HEIGHT="9"></td>
    <td WIDTH="75" VALIGN="TOP" HEIGHT="9"><font SIZE="3"><u><p ALIGN="CENTER"><strong>2003</strong></u></font></td>
    <td WIDTH="70" VALIGN="TOP" HEIGHT="9"><font SIZE="3"><u><p ALIGN="CENTER"><strong>2002</strong></u></font></td>
  </tr>
  <tr>
    <td WIDTH="187" VALIGN="TOP" COLSPAN="3" HEIGHT="4"><font SIZE="3"><p ALIGN="JUSTIFY">United
    States </font></td>
    <td WIDTH="86" VALIGN="TOP" COLSPAN="2" HEIGHT="4"><font SIZE="3"><p ALIGN="CENTER">0%</font></td>
    <td WIDTH="70" VALIGN="TOP" HEIGHT="4"><font SIZE="3"><p ALIGN="CENTER">0%</font></td>
  </tr>
  <tr>
    <td WIDTH="198" VALIGN="TOP" COLSPAN="4" HEIGHT="4"><font SIZE="3"><p ALIGN="JUSTIFY">United
    Kingdom and Europe </font></td>
    <td WIDTH="75" VALIGN="TOP" HEIGHT="4"><font SIZE="3"><p ALIGN="CENTER">0%</font></td>
    <td WIDTH="70" VALIGN="TOP" HEIGHT="4"><font SIZE="3"><p ALIGN="CENTER">0%</font></td>
  </tr>
  <tr>
    <td WIDTH="198" VALIGN="TOP" COLSPAN="4" HEIGHT="4"><font SIZE="3"><p ALIGN="JUSTIFY">Japan
    and Asia</font></td>
    <td WIDTH="75" VALIGN="TOP" HEIGHT="4"><font SIZE="3"><p ALIGN="CENTER">100%</font></td>
    <td WIDTH="70" VALIGN="TOP" HEIGHT="4"><font SIZE="3"><p ALIGN="CENTER">100%</font></td>
  </tr>
  <tr>
    <td WIDTH="198" VALIGN="TOP" COLSPAN="4" HEIGHT="4"><font SIZE="3"><p ALIGN="JUSTIFY">Other
    </font></td>
    <td WIDTH="75" VALIGN="TOP" HEIGHT="4"><font SIZE="3"><u><p ALIGN="CENTER">0%</u></font></td>
    <td WIDTH="70" VALIGN="TOP" HEIGHT="4"><font SIZE="3"><u><p ALIGN="CENTER">0%</u></font></td>
  </tr>
  <tr>
    <td WIDTH="198" VALIGN="TOP" COLSPAN="4" HEIGHT="4"><font SIZE="3"><p ALIGN="JUSTIFY">Total
    </font></td>
    <td WIDTH="75" VALIGN="TOP" HEIGHT="4"><font SIZE="3"><u><p ALIGN="CENTER">100%</u></font></td>
    <td WIDTH="70" VALIGN="TOP" HEIGHT="4"><font SIZE="3"><u><p ALIGN="CENTER">100%</u></font></td>
  </tr>
</table>
</center></div><font SIZE="3"><b>

<p ALIGN="center">&nbsp;</p>

<p ALIGN="center"><strong>- 11 -</strong></p>

<p ALIGN="JUSTIFY">&nbsp;</p>

<p ALIGN="JUSTIFY">Three months ended March 31, 2003 and 2002.</p>

<p ALIGN="JUSTIFY">Net revenue from continuing operations</p>
</b>

<p ALIGN="JUSTIFY">For the three months ended March 31, 2003 revenues increased 28% to
$46,844 from $36,470 for the three months ended March 31, 2002. Revenue for the three
months ended March 31, 2003 consists exclusively of royalty revenue since the distribution
portion of the business was sold in January 2003.</p>
<b>

<p ALIGN="JUSTIFY">Cost of revenue</p>

<p ALIGN="JUSTIFY"></b>There is no cost associated with receipt of the royalty revenue in
either the three months ended March 31, 2003 or the three months ended March 31, 2002. </p>
<b>

<p ALIGN="JUSTIFY">Selling, general and administrative</p>

<p ALIGN="JUSTIFY"></b>Selling, general and administrative expense was $40,984 for the
three months ended March 31, 2003 compared to $53,932 for the three months ended March 31,
2002. The amounts in both periods reflect the continuing expenses of a corporate office,
which is associated with seeking a reverse merger or other financial transaction for the
Company and expenses for legal and accounting fees in processing the royalty receipts in
Japan.</p>
<b>

<p ALIGN="JUSTIFY">Depreciation and amortization</p>

<p ALIGN="JUSTIFY"></b>Depreciation and amortization was $0 in the three months ended
March 31, 2003 and $800 for the three months ended March 31, 2002 principally related to
fixed assets in our Japanese office which was sold in January 2003.</p>
<b>

<p ALIGN="JUSTIFY">Other income and expenses</p>

<p ALIGN="JUSTIFY"></b>During the three months ended March 31, 2003 the Company had $4,242
in other income, net of depreciation of $449, representing the gain on sale of assets in
the closing of the Japanese office. The Company had no activity in the three months ended
March 31, 2002.</p>
<b>

<p ALIGN="JUSTIFY">Provision for taxes</p>

<p ALIGN="JUSTIFY"></b>Commencing in 1995 the Company elected to be treated as a
subchapter S corporation. Through 1998 all federal tax liabilities were recognized at the
individual stockholder level. In February 1999 the Company terminated the S election and
became subject to taxation at the corporate level. Had the Company been subject to
taxation as a C corporation in 1998, it would have received a pro forma tax benefit of
$1,099. For the three months ended March 31, 2003 the Company had no income tax liability.
</p>
<b>

<p ALIGN="JUSTIFY">&nbsp;</p>

<p ALIGN="JUSTIFY">Liquidity and capital resources</p>
</b>

<p ALIGN="JUSTIFY">At March 31, 2003 and December 31, 2002 the Company had working capital
of $(3,338) and $(9,191) and cash and cash equivalents of $99,317 and $98,901.</p>

<p ALIGN="center">&nbsp;</p>

<p ALIGN="center"><strong>- 12 -</strong></p>

<p ALIGN="JUSTIFY">The Company generated $6,151 in cash flow from operating activities in
the three months ended March 31, 2003 compared to $89,784 in the three months ended March
31, 2002. The principal reasons for the decrease in use of cash of $83,633 was the result
of an decrease of $9,824 in accounts receivable, a write off of fixed assets of $4,242 and
a decrease of $97,981 in accounts payable primarily associated with the operation of the
Japanese distribution activities which was sold in January 2003. Cash generated or used in
operating activities principally reflects the gain or loss from operations and the related
changes in working capital components.</p>

<p ALIGN="JUSTIFY">There were no investing or financing activities in the three months
ended March 31, 2003. Investing activities in the three months ended March 31, 2002. </p>
<b><u>

<p ALIGN="JUSTIFY">Factors That May Affect Future Results</p>
</u>

<p ALIGN="JUSTIFY"></b>This report, including Management&#146;s Discussion and Analysis or
Plan of Operation, contains forward-looking statements and other prospective information
relating to future events. These forward-looking statements and other information are
subject to certain risks and uncertainties that could cause results to differ materially
from historical or anticipated results, including the following:</p>

<p ALIGN="JUSTIFY"><b>We received a Going Concern opinion from our auditors on our
financial statements for the years ended December 31, 2002 and December 31, 2001. Those
statements indicate that we have reported losses for our last two years and if we do not
become profitable our business could be adversely affected.</p>

<p ALIGN="JUSTIFY"></b>We reported losses of $1,306,954 and $37,093 for 2001 and 2002. We
also have an accumulated deficit of $6,402,763 and a stockholders' equity of $1,167 as of
December 31, 2002. We can provide no assurance we will be profitable in the future and if
we do not become profitable our business could be adversely affected.</p>

<p ALIGN="JUSTIFY"><b>We were delisted by the NASDAQ Stock Market on October 9, 2001 and
our stock has been trading on the OTC Bulletin Board Market (OTCBB) since that time.</font><font
FACE="Courier New" SIZE="3"> </p>
</font></b><font SIZE="3">

<p ALIGN="JUSTIFY">The NASDAQ National/Small Cap Market delisted our stock at the opening
of business on October 9, 2001. The securities were removed from NASDAQ and subsequent to
that date the PASW Common Stock traded on the OTC Bulletin Board Market (OTCBB) as were
the Warrants (PASWW) until their expiration on November 30, 2002. While we still have
market makers for our securities there can be no assurance we can continue to rely on our
current market makers and that the price and trading volume of our securities could not be
materially affected.</p>
</font><b><font SIZE="3" COLOR="#ff0000">

<p ALIGN="JUSTIFY"></font><font SIZE="3">Our only operating subsidiary lost its major
supplier of product in July 2002. </p>

<p ALIGN="JUSTIFY"></b>Our NRCJ subsidiary is a distributor for products supplied by
NetSilicon, Inc. Revenue from licenses of the suite of Internet and Web products and sales
of services accounted for substantially all of its revenue in the years ended December 31,
2002 and 2001. In July 2002 Net Silicon, Inc. ceased producing products used by NRCJ.
During the remainder of 2002 the sales of licenses of the subsidiary decreased to a point
where operations became unprofitable. The operations were sold in January 2003. There is
no assurance that the remaining royalty income is sufficient to allow the Company to
continue operations. </p>

<p ALIGN="center">&nbsp;</p>

<p ALIGN="center"><strong>- 13 -</strong></p>

<p ALIGN="JUSTIFY"><b>We have limited resources available to continue operations unless a
successful transaction is completed with a merger partner or that additional funding can
be obtained from outside sources.</p>
</b>

<p ALIGN="JUSTIFY">At the present time we have limited resources available to continue
operations other than maintaining day-to-day activities without any capabilities for
expansion. The revenue received from royalties of our NRCJ subsidiary is sufficient to
handle only maintenance administrative operations for the Company. While efforts are in
process to seek a merger partner or other means of financing there is no assurance that
any means can be obtained to permit the Company to resume any form of operations which
could expand the business.</p>
<b>

<p ALIGN="JUSTIFY">Because our ownership is concentrated, our officers and directors and
independently our majority stockholder will be able to control all matters requiring
stockholder approval including delaying or preventing a change in our corporate control or
taking other actions of which individual shareholders may disapprove.</p>

<p ALIGN="JUSTIFY"></b>Our officers, directors and independently the majority stockholder
beneficially own approximately 60% of our outstanding common stock. These parties will be
able to exercise control over all matters requiring stockholder approval and other
investors will have minimal influence over the election of directors or other stockholder
actions. As a result, our officers, directors and independently the majority stockholder
could approve or cause the Company to take actions of which you disapprove or that are
contrary to your interests. </p>

<p ALIGN="JUSTIFY"><b>Issuance of our authorized preferred stock could discourage a change
in control, could reduce the market price of our common stock and could result in the
holders of preferred stock being granted voting rights that are superior to those of the
holders of common stock.</p>

<p ALIGN="JUSTIFY"></b>The Company is authorized to issue preferred stock without
obtaining the consent or approval of stockholders. The issuance of preferred stock could
have the effect of delaying, deferring, or preventing a change in control. Management also
has the right to grant superior voting rights to the holders of preferred stock. Any
issuance of preferred stock could materially and adversely affect the market price of the
common stock and the voting rights of the holders of common stock. The issuance of
preferred stock may also result in the loss of the voting control of holders of common
stock to the holders of preferred stock.</p>

<p ALIGN="JUSTIFY"><b>Trading in our common stock may be limited and could negatively
affect the ability to sell your securities.</p>

<p ALIGN="JUSTIFY"></b>A public market for our common stock has only existed since July
29, 1999, the date of our initial public offering. We do not know how liquid the market
for our stock and warrants will remain and if the market becomes illiquid, it may
negatively affect your ability to resell your securities. </p>
<b>

<p>ITEM 3. CONTROLS AND PROCEDURES </p>

<p>Evaluation of Disclosure Controls and Procedures</p>
</b>

<p ALIGN="JUSTIFY">Within the 90 days prior to the date of this report, PASW carried out
an evaluation, under the supervision and with the participation of the Company&#146;s
management, including the Company&#146;s Chief Executive Officer and Chief Financial
Officer, of the effectiveness of the design and operation of the Company&#146;s disclosure
controls and procedures. The Company&#146;s disclosure controls and procedures are
designed to ensure that information required to be disclosed by the Company in its
periodic Securities and Exchange Commission (&quot;SEC&quot;) filings is recorded,
processed and reported within the time periods specified in the SEC&#146;s rules and
forms. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer
concluded that the Company&#146;s disclosure controls and procedures are effective in
timely alerting them to material information relating to the Company required to be
included in the Company&#146;s periodic SEC filings.</p>

<p ALIGN="JUSTIFY">Changes in Internal Controls</p>

<p>There were no significant changes in the Company&#146;s internal controls or in other
factors that could significantly affect these controls subsequent to the date of their
evaluation.</p>

<p align="center">&nbsp;</p>

<p ALIGN="center"><strong>- 14 -</strong></p>
<b>

<p>PART II - OTHER INFORMATION</p>

<p ALIGN="JUSTIFY">ITEM 1. LEGAL PROCEEDINGS</p>
</b>

<p ALIGN="JUSTIFY">The Company is not currently involved in any litigation that is
expected to have a material adverse effect on the Company's business or financial
position. There can be no assurance, however, that third parties will not assert
infringement or other claims against the Company in the future which, regardless of the
outcome, could have an adverse impact on the Company as a result of defense costs,
diversion of management resources and other factors. </p>
<b>

<p ALIGN="JUSTIFY">ITEM 2. CHANGES IN SECURITIES.</p>

<p ALIGN="JUSTIFY">Not Applicable.</p>

<p ALIGN="JUSTIFY">ITEM 3. DEFAULTS UPON SENIOR SECURITIES.</p>

<p ALIGN="JUSTIFY">Not Applicable.</p>

<p ALIGN="JUSTIFY">ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.</p>

<p ALIGN="JUSTIFY">Not Applicable</p>

<p>ITEM 5. OTHER INFORMATION.</p>

<p ALIGN="JUSTIFY">Not Applicable.</p>

<p ALIGN="JUSTIFY">ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.</p>

<blockquote>
  <blockquote>
    <p ALIGN="JUSTIFY">Exhibits &#150; </p>
    <table CELLSPACING="0" BORDER="0" CELLPADDING="7" WIDTH="654">
      <tr>
        <td WIDTH="9%" VALIGN="TOP"><small>31.1</small></td>
        <td WIDTH="91%" VALIGN="TOP"><font SIZE="2">Certification of Chief Executive Officer
        pursuant to section 302 of the Sarbanes-Oxley Act of 2002.</font></td>
      </tr>
      <tr>
        <td WIDTH="9%" VALIGN="TOP"><small>31.2</small></td>
        <td WIDTH="91%" VALIGN="TOP"><font SIZE="2">Certification of Chief Financial Officer
        pursuant to section 302 of the Sarbanes-Oxley Act of 2002.</font></td>
      </tr>
      <tr>
        <td WIDTH="9%" VALIGN="TOP"><font SIZE="2">99.1</font> </td>
        <td WIDTH="91%" VALIGN="TOP"><font SIZE="2">Certification of Chief Executive Officer
        pursuant to 18 U.S.C.ss.1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
        of 2002.</font> </td>
      </tr>
      <tr>
        <td WIDTH="9%" VALIGN="TOP"><font SIZE="2">99.2</font> </td>
        <td WIDTH="91%" VALIGN="TOP"><font SIZE="2">Certification of Chief Financial Officer
        pursuant to 18 U.S.C.ss.1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
        of 2002.</font> </td>
      </tr>
    </table>
    <p ALIGN="JUSTIFY">Reports on Form 8-K - None</p>
    </b><p align="center">&nbsp;</p>
    <p ALIGN="center"><strong>- 15 -</strong></p>
    <b><p ALIGN="JUSTIFY">&nbsp;</p>
  </blockquote>
</blockquote>

<p ALIGN="CENTER">SIGNATURES</p>
</b>

<p ALIGN="JUSTIFY">Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.</p>
<b>

<p ALIGN="JUSTIFY">Date: May 5, 2003 PASW, INC.</p>

<p ALIGN="JUSTIFY">&nbsp;</p>

<p ALIGN="JUSTIFY">/s/ WILLIAM E. SLINEY</p>

<p ALIGN="JUSTIFY">__________________________________</p>

<p ALIGN="JUSTIFY">William E. Sliney</p>

<p ALIGN="JUSTIFY">President and Chief Financial Officer</p>

<p ALIGN="JUSTIFY">(Duly Authorized Officer and Principal</p>

<p ALIGN="JUSTIFY">Financial and Accounting Officer)</p>

<p ALIGN="JUSTIFY">&nbsp;</p>

<p ALIGN="center">&nbsp;</p>

<p ALIGN="center"><strong>- 16 -</strong></p>
</b></font>
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<p>Exhibit 99.1</p>
</font>

<p align="center"><font SIZE="2"><b>CERTIFICATION PURSUANT TO SECTION 906<br>
OF THE SARBANES-OXLEY ACT OF 2002</b> </font></p>

<p align="left"><font SIZE="2">I, Glenn P. Russell, Chief Executive Officer, Director and
Chairman of the Board of PASW, Inc</font><font SIZE="3">.</font><font SIZE="2"> (the
&#147;Company&#148;), certify, pursuant to Section&nbsp;906 of the Sarbanes-Oxley Act of
2002, 18 U.S.C. Section&nbsp;1350, that to the best of my knowledge: </font></p>

<table cellSpacing="0" cellPadding="0" width="100%" border="0">
  <tr vAlign="top">
    <td noWrap align="left" width="1%"><font SIZE="2">(1)</font></td>
    <td width="3%"></td>
    <td width="96%"><font SIZE="2">the Quarterly Report on Form&nbsp;10-QSB of the Company for
    the quarter ended March 31, 2003&nbsp; (the &#147;Report&#148;) fully complies with the
    requirements of Section&nbsp;13(a) or 15(d) of the Securities Exchange Act of 1934 (15
    U.S.C. 78m or 78o(d)); and</font></td>
  </tr>
  <tr>
    <td></td>
  </tr>
  <tr vAlign="top">
    <td noWrap align="left" width="1%"><font SIZE="2">(2)</font></td>
    <td width="3%"></td>
    <td width="96%"><font SIZE="2">the information contained in the Report fairly presents, in
    all material respects, the financial condition and results of operations of the Company.</font></td>
  </tr>
</table>
<div align="center"><center>

<table cellSpacing="0" cellPadding="0" width="100%" border="0">
</table>
</center></div>

<blockquote>
  <font SIZE="2"><p>&nbsp;</p>
  </font>
</blockquote>

<pre>                                           			      <font face="Times New Roman"> <big>/s/ </big><font
SIZE="3">Glenn P. Russell</font><big>
					   	 												</big><font SIZE="3">Glenn P. Russell</font>
                                           			 														    Chief Executive Officer
													                                            				     May 5, 2003</font></pre>
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<p>Exhibit 99.2</p>
</font>

<p align="center"><font SIZE="2"><b>CERTIFICATION PURSUANT TO SECTION 906<br>
OF THE SARBANES-OXLEY ACT OF 2002</b> </font></p>

<p align="left"><font SIZE="2">I, William E. Sliney, President, Chief Financial Officer
and Director of PASW, Inc.,&nbsp; (the &#147;Company&#148;), certify, pursuant to
Section&nbsp;906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section&nbsp;1350, that to
the best of my knowledge: </font></p>

<table cellSpacing="0" cellPadding="0" width="100%" border="0">
  <tr vAlign="top">
    <td noWrap align="left" width="1%"><font SIZE="2">(1)</font></td>
    <td width="3%"></td>
    <td width="96%"><font SIZE="2">the Quarterly Report on Form&nbsp;10-QSB of the Company for
    the quarter ended March 31, 2003&nbsp; (the &#147;Report&#148;) fully complies with the
    requirements of Section&nbsp;13(a) or 15(d) of the Securities Exchange Act of 1934 (15
    U.S.C. 78m or 78o(d)); and</font></td>
  </tr>
  <tr>
    <td></td>
  </tr>
  <tr vAlign="top">
    <td noWrap align="left" width="1%"><font SIZE="2">(2)</font></td>
    <td width="3%"></td>
    <td width="96%"><font SIZE="2">the information contained in the Report fairly presents, in
    all material respects, the financial condition and results of operations of the Company.</font></td>
  </tr>
</table>
<div align="center"><center>

<table cellSpacing="0" cellPadding="0" width="100%" border="0">
</table>
</center></div>

<blockquote>
  <font SIZE="2"><p>&nbsp;</p>
  </font>
</blockquote>

<pre>                                           			      <font face="Times New Roman"><big> <u>/s/ </big><font
size="3">William E. Sliney</font></u><big>
					   	 												</big><font size="3">William E. Sliney</font>
                                           			 														    Chief Financial Officer
													                                            				    May 5, 2003</font></pre>
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<p>Exhibit 31.1</p>
</b>

<p>The undersigned, in his capacity as the Chairman&nbsp; of PASW, Inc., provides the
following certifications required by 18 U.S.C. Section 1350, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002, and 17 C.F.R 240.13a-14. </p>

<p>Certification of Chairman: </p>

<p>I, Glenn P. Russell, Chief Executive Officer, Director and Chairman of the Board of
PASW, Inc., certify that: </p>
</font>

<table CELLSPACING="0" BORDER="0" CELLPADDING="1" WIDTH="582">
  <tr>
    <td VALIGN="MIDDLE"><font SIZE="3">1. I have reviewed this annual report on
    Form&nbsp;10-QSB of PASW, Inc.; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <p>2.
    &nbsp;&nbsp; Based on my knowledge, this annual report does not contain any untrue
    statement of a material fact or omit to state a material fact necessary to make the
    statements made, in light of the circumstances under which such statements were made, not
    misleading with respect to the period covered by this annual report; and
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
    <p>3. &nbsp;&nbsp; Based on my knowledge, the financial statements, and other financial
    information included in this annual report, fairly present in all material respects the
    financial condition, results of operations and cash flows of the registrant as of, and
    for, the periods presented in this annual report. </font></td>
  </tr>
  <tr>
    <td VALIGN="MIDDLE"></td>
  </tr>
</table>
<font SIZE="3">

<p>Date: May 5, 2003 </p>
</font>

<table CELLSPACING="0" BORDER="0" CELLPADDING="1" WIDTH="582">
  <tr>
    <td VALIGN="MIDDLE"><font SIZE="3">/s/ GLENN P. RUSSELL <p>Glenn P. Russell Chief
    Executive Officer, Director and Chairman of the Board </font></td>
  </tr>
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<p>&nbsp;</p>
<b>

<p>Exhibit 31.2</p>
</b>

<p>The undersigned, in his capacity as the President, Chief Financial Officer and Director
of PASW, Inc., provides the following certifications required by 18 U.S.C. Section 1350,
as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, and 17 C.F.R.
240.13a-14. </p>

<p>Certification of Chief Financial Officer:</p>

<p>I, William E. Sliney, President, Chief Financial Officer and Director of PASW, Inc.,
certify that: </p>
</font>

<table CELLSPACING="0" BORDER="0" CELLPADDING="1" WIDTH="582">
  <tr>
    <td VALIGN="MIDDLE"><font SIZE="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1.
    &nbsp;&nbsp; I have reviewed this quarterly report on Form&nbsp;10-QSB of PASW, Inc.;
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<p>2. Based on my knowledge, this annual report does
    not contain any untrue statement of a material fact or omit to state a material fact
    necessary to make the statements made, in light of the circumstances under which such
    statements were made, not misleading with respect to the period covered by this annual
    report; and &nbsp;&nbsp;&nbsp;</p>
    <p>&nbsp;&nbsp;&nbsp;&nbsp; 3. &nbsp;&nbsp; Based on my knowledge, the financial
    statements, and other financial information included in this annual report, fairly present
    in all material respects the financial condition, results of operations and cash flows of
    the registrant as of, and for, the periods presented in this annual report. </font></td>
  </tr>
  <tr>
    <td VALIGN="MIDDLE"></td>
  </tr>
  <tr>
    <td VALIGN="MIDDLE"></td>
  </tr>
</table>
<font SIZE="3">

<p>Date: May 5, 2003 </p>
</font>

<table CELLSPACING="0" BORDER="0" CELLPADDING="1" WIDTH="582">
  <tr>
    <td VALIGN="MIDDLE"><font SIZE="3">/s/ WILLIAM E. SLINEY <p>William E. Sliney President,
    Chief Financial Officer and Director </font></td>
  </tr>
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