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<SEC-DOCUMENT>0001082324-05-000006.txt : 20051024
<SEC-HEADER>0001082324-05-000006.hdr.sgml : 20051024
<ACCEPTANCE-DATETIME>20051024103002
ACCESSION NUMBER:		0001082324-05-000006
CONFORMED SUBMISSION TYPE:	10QSB
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20050930
FILED AS OF DATE:		20051024
DATE AS OF CHANGE:		20051024

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:		051151060

	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>form10qsb93005final.htm
<TEXT>
<!doctype html public "-//IETF//DTD HTML//EN">
<HTML>
<HEAD>
<TITLE><B>UNITED STATES</TITLE>
<META NAME="author" CONTENT="Bill's">
<META NAME="date" CONTENT="10/24/2005">
</HEAD>
<BODY style="line-height:12pt; font-size:10pt; color:#000000">
<BR>
<BR>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>UNITED STATES</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>SECURITIES AND EXCHANGE COMMISSION</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>WASHINGTON, D.C. 20549</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>FORM 10-QSB </B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>SECURITIES EXCHANGE ACT OF 1934</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>For the quarterly period ended September 30, 2005 </B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>OR </B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>Commission file number 333-75137</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>PASW, INC.</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>(Exact name of registrant as specified in its charter)</B></P>
<TABLE style="font-size:10pt" cellspacing=0 align=center><TR><TD valign=top width=15.333>&nbsp;</TD><TD valign=top width=362.867><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>California </B></P>
</TD><TD valign=top width=288.8><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>77-0390628</B></P>
</TD></TR>
<TR><TD valign=top width=15.333>&nbsp;</TD><TD valign=top width=362.867><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>(State or other jurisdiction of incorporation or organization)</B></P>
</TD><TD valign=top width=288.8><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>(I.R.S. Employer Identification No.)</B></P>
</TD></TR>
</TABLE>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<TABLE style="font-size:10pt" cellspacing=0 align=center><TR><TD valign=top width=15.333>&nbsp;</TD><TD valign=top width=362.867><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>9453 Alcosta Boulevard </B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>San Ramon, California</B></P>
</TD><TD valign=bottom width=288.8><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>94583</B></P>
</TD></TR>
<TR><TD valign=top width=15.333>&nbsp;</TD><TD valign=top width=362.867><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>(Address of principal executive offices)</B></P>
</TD><TD valign=top width=288.8><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>(Zip Code)</B></P>
</TD></TR>
</TABLE>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>(925) 828-0934</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>Registrant&#146;s telephone number, including area code)</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>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.</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Yes <U>&nbsp;X_</U> No___</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>There were 4,997,400 shares outstanding of the registrant&#146;s Common Stock, par value $.001 per share, as of October 14, 2005.</B></P>
<BR>
<BR>
<BR>
<BR>
<P style="page-break-before:always; margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center><B>&nbsp;</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>PASW, INC.</B></P>
<TABLE style="font-size:10pt" cellspacing=0 align=center><TR><TD valign=top width=37.067>&nbsp;</TD><TD valign=bottom width=531.467><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>&nbsp;&nbsp;INDEX</B></P>
</TD><TD valign=top width=49.467><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>Page No.</B></P>
</TD></TR>
<TR><TD valign=top width=37.067>&nbsp;</TD><TD valign=top width=531.467><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>PART I &#150; FINANCIAL INFORMATION</B></P>
</TD><TD valign=top width=49.467>&nbsp;</TD></TR>
<TR><TD valign=top width=568.533 colspan=2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Item l. Financial Statements (Unaudited):</B></P>
</TD><TD valign=top width=49.467>&nbsp;</TD></TR>
<TR><TD valign=top width=37.067>&nbsp;</TD><TD valign=top width=531.467><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Balance Sheets at September 30, 2005 and December 31, 2004</B></P>
</TD><TD valign=top width=49.467><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>3</B></P>
</TD></TR>
<TR><TD valign=top width=37.067>&nbsp;</TD><TD valign=top width=531.467><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Statements of Operations for the three and nine months ended September 30, 2005 and 2004 </B></P>
</TD><TD valign=bottom width=49.467><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>5</B></P>
</TD></TR>
<TR><TD valign=top width=37.067>&nbsp;</TD><TD valign=top width=531.467><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Statements of Cash Flows for nine months ended September 30, 2005 and 2004</B></P>
</TD><TD valign=top width=49.467><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>9</B></P>
</TD></TR>
<TR><TD valign=top width=37.067>&nbsp;</TD><TD valign=top width=531.467><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Notes to Condensed Financial Statements</B></P>
</TD><TD valign=top width=49.467><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>10</B></P>
</TD></TR>
<TR><TD valign=top width=568.533 colspan=2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Item 2. Management&#146;s Discussion and Analysis of Financial Condition and Plan of Operations </B></P>
</TD><TD valign=top width=49.467><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>12</B></P>
</TD></TR>
<TR><TD valign=top width=568.533 colspan=2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Item 3. Quantitative and Qualitative Disclosures About Market Risk </B></P>
</TD><TD valign=top width=49.467><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>16</B></P>
</TD></TR>
<TR><TD valign=top width=568.533 colspan=2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Item 4. Controls and Procedures</B></P>
</TD><TD valign=top width=49.467><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>18</B></P>
</TD></TR>
<TR><TD valign=top width=37.067>&nbsp;</TD><TD valign=top width=531.467><P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center><B>PART II &#150; OTHER INFORMATION</B></P>
</TD><TD valign=top width=49.467>&nbsp;</TD></TR>
<TR><TD valign=top width=568.533 colspan=2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Item 1. Legal Proceedings</B></P>
</TD><TD valign=top width=49.467><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>19</B></P>
</TD></TR>
<TR><TD valign=top width=568.533 colspan=2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Item 2. Changes in Securities and Use of Proceeds</B></P>
</TD><TD valign=top width=49.467><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>19</B></P>
</TD></TR>
<TR><TD valign=top width=568.533 colspan=2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Item 3. Defaults Upon Senior Securities</B></P>
</TD><TD valign=top width=49.467><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>19</B></P>
</TD></TR>
<TR><TD valign=top width=568.533 colspan=2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Item 4. Submission of Matters to a Vote of Security Holders</B></P>
</TD><TD valign=top width=49.467><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>19</B></P>
</TD></TR>
<TR><TD valign=top width=568.533 colspan=2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Item 5. Other Information</B></P>
</TD><TD valign=top width=49.467><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>19</B></P>
</TD></TR>
<TR><TD valign=top width=568.533 colspan=2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Item 6. Exhibits and Reports on Form 8-K</B></P>
</TD><TD valign=top width=49.467><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>19</B></P>
</TD></TR>
<TR><TD valign=top width=568.533 colspan=2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Signatures</B></P>
</TD><TD valign=top width=49.467><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>20</B></P>
</TD></TR>
</TABLE>
<P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>- 2 -</B></P>
<BR>
<BR>
<BR>
<BR>
<P style="page-break-before:always; margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>PART I &#150; FINANCIAL INFORMATION</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>ITEM 1. FINANCIAL STATEMENTS</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>PASW, INC.</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>CONSOLIDATED BALANCE SHEETS</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>(Unaudited)</B></P>
<TABLE style="font-size:10pt" cellspacing=0 align=center><TR><TD style="border-top:3pt solid #000000; border-bottom:3pt solid #000000" valign=top width=354.533><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD style="border-top:3pt solid #000000; border-bottom:3pt solid #000000" valign=bottom width=102.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>September 30,</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>&nbsp;2005</B></P>
</TD><TD style="border-top:3pt solid #000000; border-bottom:3pt solid #000000" valign=top width=36.067><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD style="border-top:3pt solid #000000; border-bottom:3pt solid #000000" valign=top width=102.2><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>December 31, <BR>
2004</B></P>
</TD></TR>
<TR><TD valign=top width=354.533><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>ASSETS</B></P>
</TD><TD valign=top width=102.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;</P>
</TD><TD valign=top width=36.067><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;</P>
</TD><TD valign=top width=102.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;</P>
</TD></TR>
<TR><TD valign=top width=354.533><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Current assets:</B></P>
</TD><TD valign=top width=102.2>&nbsp;</TD><TD valign=top width=36.067>&nbsp;</TD><TD valign=top width=102.2>&nbsp;</TD></TR>
<TR><TD valign=top width=354.533><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Cash and cash equivalents</B></P>
</TD><TD valign=top width=102.2><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>$ 250,032</B></P>
</TD><TD valign=top width=36.067>&nbsp;</TD><TD valign=top width=102.2><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>$ 190,048</B></P>
</TD></TR>
<TR><TD valign=top width=354.533><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Accounts receivable, net of allowance of $0 and $0</B></P>
</TD><TD valign=bottom width=102.2><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>18,768</B></P>
</TD><TD valign=bottom width=36.067><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>&nbsp;&nbsp;&nbsp;</P>
</TD><TD valign=bottom width=102.2><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>26,398</B></P>
</TD></TR>
<TR><TD valign=top width=354.533><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Other asset</B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Total current assets</B></P>
</TD><TD valign=top width=102.2><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>0</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>268,800</B></P>
</TD><TD valign=top width=36.067><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;</P>
</TD><TD valign=top width=102.2><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>5,463</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>221,909</B></P>
</TD></TR>
<TR><TD style="border-top:0.75pt solid #000000; border-bottom:3pt double #000000" valign=top width=354.533><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Total assets</B></P>
</TD><TD style="border-top:0.75pt solid #000000; border-bottom:3pt double #000000" valign=top width=102.2><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>$ 268,800</B></P>
</TD><TD style="border-top:0.75pt solid #000000; border-bottom:3pt double #000000" valign=top width=36.067>&nbsp;</TD><TD style="border-top:0.75pt solid #000000; border-bottom:3pt double #000000" valign=top width=102.2><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>$ 221,909</B></P>
</TD></TR>
</TABLE>
<P style="margin-top:5pt; margin-bottom:5pt; font-family:Courier New; font-size:12pt"><B>&nbsp;</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>See accompanying notes to condensed financial statements.</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>- 3 -</B></P>
<BR>
<BR>
<BR>
<BR>
<P style="page-break-before:always; margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>PASW, INC.</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>CONSOLIDATED BALANCE SHEETS</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>(Unaudited)</B></P>
<TABLE style="font-size:10pt" cellspacing=0 align=center><TR><TD style="border-top:3pt solid #000000; border-bottom:3pt solid #000000" valign=top width=370.8><P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;</P>
</TD><TD style="border-top:3pt solid #000000; border-bottom:3pt solid #000000" valign=bottom width=92.6><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>September 30, </B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>2005</B></P>
</TD><TD style="border-top:3pt solid #000000; border-bottom:3pt solid #000000" valign=bottom width=30><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD style="border-top:3pt solid #000000; border-bottom:3pt solid #000000" valign=bottom width=98.6><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>December 31, <BR>
2004</B></P>
</TD></TR>
<TR><TD valign=top width=370.8><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>LIABILITIES AND STOCKHOLDERS&#146;EQUITY</B></P>
</TD><TD valign=top width=92.6><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;</P>
</TD><TD valign=top width=30><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;</P>
</TD><TD valign=top width=98.6><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;</P>
</TD></TR>
<TR><TD valign=top width=370.8><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Current liabilities:</B></P>
</TD><TD valign=top width=92.6>&nbsp;</TD><TD valign=top width=30>&nbsp;</TD><TD valign=top width=98.6>&nbsp;</TD></TR>
<TR><TD valign=top width=370.8><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Accounts payable and accrued expenses</B></P>
</TD><TD valign=top width=92.6><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>$88,277</B></P>
</TD><TD valign=top width=30>&nbsp;</TD><TD valign=top width=98.6><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>$ 92,004</B></P>
</TD></TR>
<TR><TD style="border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000" valign=top width=370.8><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Total current liabilities</B></P>
</TD><TD style="border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000" valign=top width=92.6><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>88,277</B></P>
</TD><TD style="border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000" valign=top width=30><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD style="border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000" valign=top width=98.6><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>92,004</B></P>
</TD></TR>
<TR><TD valign=top width=370.8><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Commitments and contingencies</B></P>
</TD><TD valign=top width=92.6><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;</P>
</TD><TD valign=top width=30><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;</P>
</TD><TD valign=top width=98.6><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;</P>
</TD></TR>
<TR><TD valign=top width=370.8><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Stockholders&#146; equity:</B></P>
</TD><TD valign=top width=92.6>&nbsp;</TD><TD valign=top width=30>&nbsp;</TD><TD valign=top width=98.6>&nbsp;</TD></TR>
<TR><TD valign=bottom width=370.8><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Preferred stock, par value $0.01 per share, 10,000,000 shares authorized; no shares outstanding</B></P>
</TD><TD valign=bottom width=92.6><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>0</B></P>
</TD><TD valign=bottom width=30>&nbsp;</TD><TD valign=bottom width=98.6><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>0</B></P>
</TD></TR>
<TR><TD valign=top width=370.8><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><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></P>
</TD><TD valign=bottom width=92.6><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>4,998</B></P>
</TD><TD valign=bottom width=30>&nbsp;</TD><TD valign=bottom width=98.6><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>4,998</B></P>
</TD></TR>
<TR><TD valign=top width=370.8><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Additional paid-in capital</B></P>
</TD><TD valign=top width=92.6><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>6,398,754</B></P>
</TD><TD valign=top width=30>&nbsp;</TD><TD valign=top width=98.6><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>6,398,754</B></P>
</TD></TR>
<TR><TD valign=top width=370.8><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Accumulated deficit</B></P>
</TD><TD valign=top width=92.6><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>(6,192,089)</B></P>
</TD><TD valign=top width=30>&nbsp;</TD><TD valign=top width=98.6><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>(6,267,607)</B></P>
</TD></TR>
<TR><TD valign=top width=370.8><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Cumulative adjustment for currency translation</B></P>
</TD><TD valign=top width=92.6><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>(31,140) </B></P>
</TD><TD valign=top width=30><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD valign=top width=98.6><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>(6,240)</B></P>
</TD></TR>
<TR><TD style="border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000" valign=top width=370.8><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Total stockholders&#146; equity</B></P>
</TD><TD style="border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000" valign=top width=92.6><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>180,523</B></P>
</TD><TD style="border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000" valign=top width=30><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD style="border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000" valign=top width=98.6><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>129,905</B></P>
</TD></TR>
<TR><TD style="border-bottom:3pt solid #000000" valign=top width=370.8><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD style="border-bottom:3pt solid #000000" valign=top width=92.6><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>$ 268,800</B></P>
</TD><TD style="border-bottom:3pt solid #000000" valign=top width=30><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD style="border-bottom:3pt solid #000000" valign=top width=98.6><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>$ 221,909</B></P>
</TD></TR>
</TABLE>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>See accompanying notes to condensed financial statements.</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>- 4 -</B></P>
<BR>
<BR>
<BR>
<BR>
<P style="page-break-before:always; margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>PASW, INC.</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>CONSOLIDATED STATEMENTS OF OPERATIONS</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>(Unaudited)</B></P>
<TABLE style="font-size:10pt" cellspacing=0 align=center><TR><TD style="border-bottom:3pt solid #000000" valign=top width=358.933><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD style="border-bottom:3pt solid #000000" valign=top width=248.067 colspan=3><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>&nbsp;&nbsp;</B></P>
</TD></TR>
<TR><TD valign=top width=358.933><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD style="border-bottom:3pt solid #000000" valign=top width=248.067 colspan=3><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>For the Three Months Ended </B></P>
</TD></TR>
<TR><TD style="border-bottom:3pt solid #000000" valign=top width=358.933><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD style="border-bottom:3pt solid #000000" valign=top width=104><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>September 30, 2005</B></P>
</TD><TD style="border-bottom:3pt solid #000000" valign=top width=34><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD style="border-bottom:3pt solid #000000" valign=bottom width=110.067><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>September 30, 2004</B></P>
</TD></TR>
<TR><TD valign=top width=358.933><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Revenue - Royalties </B></P>
</TD><TD valign=top width=104><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>$ 56,972 </B></P>
</TD><TD valign=top width=34><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;</P>
</TD><TD valign=top width=110.067><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>$ 33,874 </B></P>
</TD></TR>
<TR><TD valign=top width=358.933>&nbsp;</TD><TD valign=top width=104>&nbsp;</TD><TD valign=top width=34>&nbsp;</TD><TD valign=top width=110.067>&nbsp;</TD></TR>
<TR><TD valign=top width=358.933><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Expenses - Selling, general and administrative</B></P>
</TD><TD valign=top width=104><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>21,731</B></P>
</TD><TD valign=top width=34><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD valign=top width=110.067><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>41,513</B></P>
</TD></TR>
<TR><TD style="border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000" valign=top width=358.933><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Income (loss) from operations</B></P>
</TD><TD style="border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000" valign=top width=104><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>35,241</B></P>
</TD><TD style="border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000" valign=top width=34><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD style="border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000" valign=top width=110.067><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>(7,639)</B></P>
</TD></TR>
<TR><TD valign=top width=358.933><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Income taxes</B></P>
</TD><TD valign=top width=104><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>7,782</B></P>
</TD><TD valign=top width=34><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD valign=top width=110.067><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>10,888</B></P>
</TD></TR>
<TR><TD style="border-top:0.75pt solid #000000; border-bottom:3pt double #000000" valign=top width=358.933><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Net income (loss) </B></P>
</TD><TD style="border-top:0.75pt solid #000000; border-bottom:3pt double #000000" valign=top width=104><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>$ 27,459</B></P>
</TD><TD style="border-top:0.75pt solid #000000; border-bottom:3pt double #000000" valign=top width=34><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD style="border-top:0.75pt solid #000000; border-bottom:3pt double #000000" valign=top width=110.067><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>$ (18,527)</B></P>
</TD></TR>
<TR><TD valign=top width=358.933><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Net income &nbsp;per common share: Basic and Diluted</B></P>
</TD><TD style="border-bottom:3pt double #000000" valign=bottom width=104><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>$ 0.01</B></P>
</TD><TD style="border-bottom:3pt double #000000" valign=bottom width=34><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD style="border-bottom:3pt double #000000" valign=bottom width=110.067><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>$ 0.00</B></P>
</TD></TR>
<TR><TD valign=top width=358.933><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Weighted average common stock shares outstanding Basic and diluted</B></P>
</TD><TD style="border-bottom:3pt double #000000" valign=bottom width=104><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>4,997,400</B></P>
</TD><TD style="border-bottom:3pt double #000000" valign=bottom width=34><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD style="border-bottom:3pt double #000000" valign=bottom width=110.067><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>4,997,400</B></P>
</TD></TR>
</TABLE>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>See accompanying notes to condensed financial statements.</B></P>
<B><P style="margin:0pt; text-indent:216pt; font-family:Times New Roman; font-size:12pt"><BR></B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>- 5 -</B></P>
<BR>
<BR>
<BR>
<BR>
<P style="page-break-before:always; margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>PASW, INC.</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>(Unaudited)</B></P>
<TABLE style="font-size:10pt" cellspacing=0 align=center><TR><TD style="border-bottom:3pt solid #000000" valign=top width=368.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;</P>
</TD><TD style="border-bottom:3pt solid #000000" valign=top width=202.8 colspan=3><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>&nbsp;&nbsp;</B></P>
</TD></TR>
<TR><TD valign=top width=368.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD style="border-bottom:3pt solid #000000" valign=top width=202.8 colspan=3><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>For the Three Months Ended </B></P>
</TD></TR>
<TR><TD style="border-bottom:3pt solid #000000" valign=top width=368.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD style="border-bottom:3pt solid #000000" valign=top width=88.4><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>September 30, 2005</B></P>
</TD><TD style="border-bottom:3pt solid #000000" valign=top width=26><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD style="border-bottom:3pt solid #000000" valign=top width=88.4><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>September 30, 2004</B></P>
</TD></TR>
<TR><TD valign=top width=368.2><P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;</P>
</TD><TD valign=top width=88.4><P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;</P>
</TD><TD valign=top width=26><P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;</P>
</TD><TD valign=top width=88.4><P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;</P>
</TD></TR>
<TR><TD valign=top width=368.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Net income (loss)</B></P>
</TD><TD valign=top width=88.4><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>$ 27,459</B></P>
</TD><TD valign=top width=26>&nbsp;</TD><TD valign=top width=88.4><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>$ (18,527)</B></P>
</TD></TR>
<TR><TD valign=top width=368.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Other comprehensive income (loss):</B></P>
</TD><TD valign=top width=88.4>&nbsp;</TD><TD valign=top width=26>&nbsp;</TD><TD valign=top width=88.4>&nbsp;</TD></TR>
<TR><TD valign=top width=368.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Foreign currency translation adjustment</B></P>
</TD><TD valign=top width=88.4><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>7,942</B></P>
</TD><TD valign=top width=26><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD valign=top width=88.4><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>(7,072)</B></P>
</TD></TR>
<TR><TD style="border-top:0.75pt solid #000000; border-bottom:3pt double #000000" valign=top width=368.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Comprehensive income (loss) </B></P>
</TD><TD style="border-top:0.75pt solid #000000; border-bottom:3pt double #000000" valign=top width=88.4><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>$35,401</B></P>
</TD><TD style="border-top:0.75pt solid #000000; border-bottom:3pt double #000000" valign=top width=26><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD style="border-top:0.75pt solid #000000; border-bottom:3pt double #000000" valign=top width=88.4><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>$ (25,599)</B></P>
</TD></TR>
</TABLE>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>See accompanying notes to condensed financial statements.</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>- 6 -</B></P>
<BR>
<BR>
<BR>
<BR>
<P style="page-break-before:always; margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>PASW, INC.</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>CONSOLIDATED STATEMENTS OF OPERATIONS</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>(Unaudited)</B></P>
<TABLE style="font-size:10pt" cellspacing=0 align=center><TR><TD style="border-bottom:3pt solid #000000" valign=top width=358.933><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD style="border-bottom:3pt solid #000000" valign=top width=248.067 colspan=3><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>&nbsp;&nbsp;</B></P>
</TD></TR>
<TR><TD valign=top width=358.933><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD style="border-bottom:3pt solid #000000" valign=top width=248.067 colspan=3><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>For the Nine Months Ended </B></P>
</TD></TR>
<TR><TD style="border-bottom:3pt solid #000000" valign=top width=358.933><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD style="border-bottom:3pt solid #000000" valign=top width=104><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>September 30, 2005</B></P>
</TD><TD style="border-bottom:3pt solid #000000" valign=top width=34><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD style="border-bottom:3pt solid #000000" valign=bottom width=110.067><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>September 30, 2004</B></P>
</TD></TR>
<TR><TD valign=top width=358.933><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Revenue - Royalties </B></P>
</TD><TD valign=top width=104><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>$165,951 </B></P>
</TD><TD valign=top width=34><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;</P>
</TD><TD valign=top width=110.067><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>$142,514 </B></P>
</TD></TR>
<TR><TD valign=top width=358.933>&nbsp;</TD><TD valign=top width=104>&nbsp;</TD><TD valign=top width=34>&nbsp;</TD><TD valign=top width=110.067>&nbsp;</TD></TR>
<TR><TD valign=top width=358.933><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Expenses - Selling, general and administrative</B></P>
</TD><TD valign=top width=104><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>82,651</B></P>
</TD><TD valign=top width=34><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD valign=top width=110.067><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>102,510</B></P>
</TD></TR>
<TR><TD style="border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000" valign=top width=358.933><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Income &nbsp;from operations</B></P>
</TD><TD style="border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000" valign=top width=104><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>83,300</B></P>
</TD><TD style="border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000" valign=top width=34><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD style="border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000" valign=top width=110.067><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>40,004</B></P>
</TD></TR>
<TR><TD valign=top width=358.933><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Income taxes</B></P>
</TD><TD valign=top width=104><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>7,782</B></P>
</TD><TD valign=top width=34><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B></P>
</TD><TD valign=top width=110.067><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>10,888</B></P>
</TD></TR>
<TR><TD style="border-top:0.75pt solid #000000; border-bottom:3pt double #000000" valign=top width=358.933><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Net income </B></P>
</TD><TD style="border-top:0.75pt solid #000000; border-bottom:3pt double #000000" valign=top width=104><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>$ 75,518</B></P>
</TD><TD style="border-top:0.75pt solid #000000; border-bottom:3pt double #000000" valign=top width=34><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD style="border-top:0.75pt solid #000000; border-bottom:3pt double #000000" valign=top width=110.067><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>$ 29,116</B></P>
</TD></TR>
<TR><TD valign=top width=358.933><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Net income &nbsp;per common share: Basic and Diluted</B></P>
</TD><TD style="border-bottom:3pt double #000000" valign=bottom width=104><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>$ 0.02</B></P>
</TD><TD style="border-bottom:3pt double #000000" valign=bottom width=34><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD style="border-bottom:3pt double #000000" valign=bottom width=110.067><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>$ 0.01</B></P>
</TD></TR>
<TR><TD valign=top width=358.933><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Weighted average common stock shares outstanding Basic and diluted</B></P>
</TD><TD style="border-bottom:3pt double #000000" valign=bottom width=104><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>4,997,400</B></P>
</TD><TD style="border-bottom:3pt double #000000" valign=bottom width=34><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD style="border-bottom:3pt double #000000" valign=bottom width=110.067><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>4,997,400</B></P>
</TD></TR>
</TABLE>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>See accompanying notes to condensed financial statements.</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>- 7 -</B></P>
<BR>
<BR>
<BR>
<BR>
<P style="page-break-before:always; margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>PASW, INC.</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>(Unaudited)</B></P>
<TABLE style="font-size:10pt" cellspacing=0 align=center><TR><TD style="border-bottom:3pt solid #000000" valign=top width=368.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;</P>
</TD><TD style="border-bottom:3pt solid #000000" valign=top width=202.8 colspan=3><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>&nbsp;&nbsp;</B></P>
</TD></TR>
<TR><TD valign=top width=368.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD style="border-bottom:3pt solid #000000" valign=top width=202.8 colspan=3><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>For the Nine Months Ended </B></P>
</TD></TR>
<TR><TD style="border-bottom:3pt solid #000000" valign=top width=368.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD style="border-bottom:3pt solid #000000" valign=top width=88.4><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>September 30, 2005</B></P>
</TD><TD style="border-bottom:3pt solid #000000" valign=top width=26><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD style="border-bottom:3pt solid #000000" valign=top width=88.4><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>September 30, 2004</B></P>
</TD></TR>
<TR><TD valign=top width=368.2><P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;</P>
</TD><TD valign=top width=88.4><P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;</P>
</TD><TD valign=top width=26><P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;</P>
</TD><TD valign=top width=88.4><P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;</P>
</TD></TR>
<TR><TD valign=top width=368.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Net income (loss)</B></P>
</TD><TD valign=top width=88.4><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>$ 75,518</B></P>
</TD><TD valign=top width=26>&nbsp;</TD><TD valign=top width=88.4><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>$ 29,116</B></P>
</TD></TR>
<TR><TD valign=top width=368.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Other comprehensive income (loss):</B></P>
</TD><TD valign=top width=88.4>&nbsp;</TD><TD valign=top width=26>&nbsp;</TD><TD valign=top width=88.4>&nbsp;</TD></TR>
<TR><TD valign=top width=368.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Foreign currency translation adjustment</B></P>
</TD><TD valign=top width=88.4><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>(31,140)</B></P>
</TD><TD valign=top width=26><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD valign=top width=88.4><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>288</B></P>
</TD></TR>
<TR><TD style="border-top:0.75pt solid #000000; border-bottom:3pt double #000000" valign=top width=368.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Comprehensive income </B></P>
</TD><TD style="border-top:0.75pt solid #000000; border-bottom:3pt double #000000" valign=top width=88.4><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>$ 44,378,</B></P>
</TD><TD style="border-top:0.75pt solid #000000; border-bottom:3pt double #000000" valign=top width=26><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD style="border-top:0.75pt solid #000000; border-bottom:3pt double #000000" valign=top width=88.4><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>$ 29,404</B></P>
</TD></TR>
</TABLE>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>See accompanying notes to condensed financial statements.</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin-top:0pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin-top:5pt; margin-bottom:0pt; font-family:Times New Roman; font-size:12pt"><B>&nbsp;</B></P>
<P style="margin-top:5pt; margin-bottom:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin-top:5pt; margin-bottom:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin-top:5pt; margin-bottom:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin-top:5pt; margin-bottom:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin-top:5pt; margin-bottom:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin-top:5pt; margin-bottom:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin-top:5pt; margin-bottom:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin-top:5pt; margin-bottom:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<B><P style="margin:0pt; text-indent:216pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">- 8 -</B></P>
<BR>
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<P style="page-break-before:always; margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>PASW, INC.</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>CONSOLIDATED STATEMENTS OF CASH FLOWS</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>(Unaudited)</B></P>
<TABLE style="font-size:10pt" cellspacing=0 align=center><TR><TD style="border-bottom:3pt solid #000000" valign=top width=398.4><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;</P>
</TD><TD style="border-bottom:3pt solid #000000" valign=top width=226.6 colspan=3><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>&nbsp;&nbsp;&nbsp;&nbsp;</B></P>
</TD></TR>
<TR><TD valign=top width=398.4><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD style="border-bottom:3pt solid #000000" valign=top width=226.6 colspan=3><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>For the Nine Months Ended </B></P>
</TD></TR>
<TR><TD style="border-bottom:3pt solid #000000" valign=top width=398.4><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;</P>
</TD><TD style="border-bottom:3pt solid #000000" valign=bottom width=104.6><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>September 30, 2005</B></P>
</TD><TD style="border-bottom:3pt solid #000000" valign=bottom width=30>&nbsp;</TD><TD style="border-bottom:3pt solid #000000" valign=bottom width=92><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>September 30, 2004</B></P>
</TD></TR>
<TR><TD valign=top width=398.4><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Cash flows from operating activities: Continuing operations</B></P>
</TD><TD valign=top width=104.6><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;</P>
</TD><TD valign=top width=30><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;</P>
</TD><TD valign=top width=92><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;</P>
</TD></TR>
<TR><TD valign=top width=398.4><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Net income </B></P>
</TD><TD valign=top width=104.6><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>$ 75,518</B></P>
</TD><TD valign=top width=30>&nbsp;</TD><TD valign=top width=92><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>$ 29,116</B></P>
</TD></TR>
<TR><TD valign=top width=398.4><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Adjustments to reconcile net loss to net cash used in operating activities:</B></P>
</TD><TD valign=top width=104.6>&nbsp;</TD><TD valign=top width=30>&nbsp;</TD><TD valign=top width=92>&nbsp;</TD></TR>
<TR><TD valign=top width=398.4><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>(Increase) decrease in assets:</B></P>
</TD><TD valign=top width=104.6>&nbsp;</TD><TD valign=top width=30>&nbsp;</TD><TD valign=top width=92>&nbsp;</TD></TR>
<TR><TD valign=top width=398.4><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Accounts receivable</B></P>
</TD><TD valign=top width=104.6><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>7,630</B></P>
</TD><TD valign=top width=30>&nbsp;</TD><TD valign=top width=92><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>16,512</B></P>
</TD></TR>
<TR><TD valign=top width=398.4><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Prepaid expenses</B></P>
</TD><TD valign=top width=104.6><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>5,463</B></P>
</TD><TD valign=top width=30>&nbsp;</TD><TD valign=top width=92><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>0</B></P>
</TD></TR>
<TR><TD valign=top width=398.4><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Increase (decrease) in liabilities:</B></P>
</TD><TD valign=top width=104.6>&nbsp;</TD><TD valign=top width=30>&nbsp;</TD><TD valign=top width=92>&nbsp;</TD></TR>
<TR><TD valign=top width=398.4><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Accounts payable and accrued expenses</B></P>
</TD><TD valign=top width=104.6><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>&nbsp;(3,727)</B></P>
</TD><TD valign=top width=30><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD valign=top width=92><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>(24,602)</B></P>
</TD></TR>
<TR><TD style="border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000" valign=top width=398.4><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Net cash used in operating activities </B></P>
</TD><TD style="border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000" valign=top width=104.6><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>84,884 </B></P>
</TD><TD style="border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000" valign=top width=30><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD style="border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000" valign=top width=92><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>21,026</B></P>
</TD></TR>
<TR><TD valign=top width=398.4><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;</P>
</TD><TD valign=top width=104.6><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD valign=top width=30><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD valign=top width=92><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD></TR>
<TR><TD style="border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000" valign=top width=398.4><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Cash flows from investing activities:</B></P>
</TD><TD style="border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000" valign=top width=104.6><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>0</B></P>
</TD><TD style="border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000" valign=top width=30><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>&nbsp;&nbsp;</B></P>
</TD><TD style="border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000" valign=top width=92><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>0</B></P>
</TD></TR>
<TR><TD valign=top width=398.4><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;</P>
</TD><TD valign=top width=104.6><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD valign=top width=30><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD valign=top width=92><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;</P>
</TD></TR>
<TR><TD style="border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000" valign=top width=398.4><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Cash flows from financing activities - Payment of related party note</B></P>
</TD><TD style="border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000" valign=bottom width=104.6><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>0</B></P>
</TD><TD style="border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000" valign=top width=30><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;</P>
</TD><TD style="border-top:0.75pt solid #000000; border-bottom:0.75pt solid #000000" valign=bottom width=92><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>(32,075)</B></P>
</TD></TR>
<TR><TD valign=top width=398.4><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;</P>
</TD><TD valign=top width=104.6><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;</P>
</TD><TD valign=top width=30><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD valign=top width=92><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;</P>
</TD></TR>
<TR><TD style="border-bottom:0.75pt solid #000000" valign=top width=398.4><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Effect of exchange rate changes on cash</B></P>
</TD><TD style="border-bottom:0.75pt solid #000000" valign=top width=104.6><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>(24,900)</B></P>
</TD><TD style="border-bottom:0.75pt solid #000000" valign=top width=30><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD style="border-bottom:0.75pt solid #000000" valign=top width=92><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>288</B></P>
</TD></TR>
<TR><TD valign=top width=398.4><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Net increase (decrease) in cash</B></P>
</TD><TD valign=top width=104.6><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>59,984</B></P>
</TD><TD valign=top width=30><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD valign=top width=92><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>(10,761)</B></P>
</TD></TR>
<TR><TD valign=top width=398.4><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Cash &#150; Beginning</B></P>
</TD><TD valign=top width=104.6><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>190,048</B></P>
</TD><TD valign=top width=30><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD valign=top width=92><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>189,053</B></P>
</TD></TR>
<TR><TD style="border-top:0.75pt solid #000000; border-bottom:3pt double #000000" valign=top width=398.4><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Cash &#150; Ending</B></P>
</TD><TD style="border-top:0.75pt solid #000000; border-bottom:3pt double #000000" valign=top width=104.6><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>$ 250,032</B></P>
</TD><TD style="border-top:0.75pt solid #000000; border-bottom:3pt double #000000" valign=top width=30><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>&nbsp;&nbsp;</P>
</TD><TD style="border-top:0.75pt solid #000000; border-bottom:3pt double #000000" valign=top width=92><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>$ 178,292</B></P>
</TD></TR>
<TR><TD valign=top width=625 colspan=4><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Supplemental non-cash financing activities: None </B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>See accompanying notes to condensed financial statements</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD></TR>
</TABLE>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>- 9 -</B></P>
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<P style="page-break-before:always; margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>PASW, INC.</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>(UNAUDITED)</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>General</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted. Results of operations for the interim periods presented are not necessarily indicative of results which may be expected for any other interim period or for the year as a whole. 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, 2004 which are contained in the Company&#146;s Annual Report on Form 10-KSB filed with the Securities and Exchange Commission (the <I>&quot;SEC&quot;</I>) on March 29, 2005, 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>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>The accompanying unaudited interim financial statements include all adjustments which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented.</P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Nature of Operations</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>PASW, Inc., formerly Pacific Softworks, Inc. (<I>&quot;We&quot;</I>, <I>&quot;Ours&quot;</I> or <I>&quot;the Company&quot;</I>), was incorporated in California in November 1992. We developed and licensed Internet and Web related software and software development tools that enable communications, based on a set of rules known as protocols. Our products were embedded into systems and developed or manufactured by others. In August 2000, we sold all the assets of our Internet and Web operations. From January 2001 our operations, consisting of sales of software and licenses, were conducted principally through an administrative office in Northern California and a sales office of our subsidiary, National Research Corporation &#150; Japan (<I>&quot;NRCJ&quot;</I>). In January 2003 the sales office was closed however NRCJ will continue to receive royalty income from former NRCJ customers.</P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Use of Estimates</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>Preparing financial statements in conformity with generally accepted accounting principles requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.</P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Revenue Recognition </B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>We are a licensor of software and generate revenue primarily from the one-time sales of licensed software. Generally, revenue is recognized upon shipment of the licensed software. For multiple element license arrangements, the license fee is allocated to the </P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>-10-</B></P>
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<P style="page-break-before:always; margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>various elements based on fair value. When a multiple element arrangement includes rights to a post-contract customer support, the portion of the license fee allocated to each function is recognized ratably over the term of the arrangement.&nbsp;</P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Translation of Foreign Currency</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>We translate foreign currency financial statements of NRCJ in accordance with SFAS 52, <I>&quot;Foreign Currency Translation.&quot;</I> Assets and liabilities are translated at current exchange rates and related revenues and expenses are translated at average exchange rates in effect during the period. Resulting translation adjustments are recorded as a separate component in stockholders&#146; equity. Foreign currency transaction gains and losses are included in determining net income.</P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Stock-Based Compensation</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>We use the intrinsic value method of accounting for stock-based compensation for employees in accordance with Accounting Principles Board Opinion (<I>&quot;APB&quot;</I>) No. 25.</P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Earnings Per Share</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>SFAS No. 128, <I>&quot;Earnings Per Share&quot;</I> requires presentation of basic earnings per share (<I>&quot;Basic EPS&quot;</I>) and diluted earnings per share (<I>&quot;Diluted EPS&quot;</I>). Basic earnings per share is computed by dividing earnings available to common stockholders by the weighted average number of outstanding common shares during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period. The computation of diluted EPS does not assume conversion, exercise or contingent exercise of securities that would have an anti-dilutive effect on losses.</P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>COMPUTATION OF WEIGHTED AVERAGE COMMON SHARES OUTSTANDING</B></P>
<TABLE style="font-size:10pt" cellspacing=0 align=center><TR><TD style="border-bottom:3pt solid #000000" valign=top width=318.6><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD style="border-bottom:3pt solid #000000" valign=bottom width=99.267><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>Total Number of Shares</B></P>
</TD><TD style="border-bottom:3pt solid #000000" valign=bottom width=90.533><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>Three Months Ended September 30, 2005</B></P>
</TD><TD style="border-bottom:3pt solid #000000" valign=bottom width=97.067><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>Nine Months Ended September 30, 2005</B></P>
</TD></TR>
<TR><TD valign=top width=318.6><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Outstanding shares as of January 1, 2005</B></P>
</TD><TD valign=top width=99.267><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>4,997,400</B></P>
</TD><TD valign=top width=90.533><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>4,997,400</B></P>
</TD><TD valign=top width=97.067><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>4,997,400</B></P>
</TD></TR>
<TR><TD valign=top width=318.6><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Options treated as Common Stock</B></P>
</TD><TD valign=top width=99.267><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>1,202,674</B></P>
</TD><TD valign=top width=90.533><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>1,202,674</B></P>
</TD><TD valign=top width=97.067><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>1,202,674</B></P>
</TD></TR>
<TR><TD style="border-top:0.75pt solid #000000; border-bottom:3pt double #000000" valign=top width=318.6><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Total weighted average shares outstanding</B></P>
</TD><TD style="border-top:0.75pt solid #000000; border-bottom:3pt double #000000" valign=top width=99.267><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>6,200,074</B></P>
</TD><TD style="border-top:0.75pt solid #000000; border-bottom:3pt double #000000" valign=top width=90.533><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>6,200,074</B></P>
</TD><TD style="border-top:0.75pt solid #000000; border-bottom:3pt double #000000" valign=top width=97.067><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>6,200,074</B></P>
</TD></TR>
<TR><TD valign=top width=417.867 colspan=2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Net income</B></P>
</TD><TD style="border-bottom:3pt double #000000" valign=top width=90.533><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>$27,459</B></P>
</TD><TD style="border-bottom:3pt double #000000" valign=top width=97.067><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>$75,518</B></P>
</TD></TR>
<TR><TD valign=top width=417.867 colspan=2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Net gain (loss) per common share basic and diluted</B></P>
</TD><TD style="border-bottom:3pt double #000000" valign=bottom width=90.533><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>$ 0.01 </B></P>
</TD><TD style="border-bottom:3pt double #000000" valign=bottom width=97.067><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>$ 0.02</B></P>
</TD></TR>
</TABLE>
<P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center>&nbsp;&nbsp;<B>- 11 -</B></P>
<BR>
<BR>
<BR>
<BR>
<P style="page-break-before:always; margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>ITEM 2. MANAGEMENT&#146;S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>AND RESULTS OF OPERATIONS.</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>General</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>Since the closure of our US development and sales facilities in 2000 and our Japanese office in January 2003 we receive royalties from one former customer of our NRCJ subsidiary which serves as our principal source of revenue. We operate an office in San Ramon, California in which we perform all administrative functions necessary to keep the Company in compliance with regulatory requirements. Since the closing of sales and licensing activities in the United States we have sought, and continue to seek, potential merger opportunities. </P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>We operate in one business segment and our fiscal year ends on December 31.</P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Results of Operations </B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">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>
<TABLE style="font-size:10pt" cellspacing=0 align=center><TR><TD style="border-top:3pt solid #000000" valign=top width=287.867><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD style="border-top:3pt solid #000000" valign=top width=169.067 colspan=2><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>Unaudited</B></P>
</TD><TD style="border-top:3pt solid #000000" valign=top width=169.067 colspan=2><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>Unaudited</B></P>
</TD><TD style="border-top:3pt solid #000000" valign=top width=15.4 colspan=2>&nbsp;</TD></TR>
<TR><TD valign=top width=287.867><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD valign=top width=169.067 colspan=2><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>For the Three Months Ended<BR>
September 30,</B></P>
</TD><TD valign=top width=169.067 colspan=2><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>For the Nine Months Ended<BR>
September 30,</B></P>
</TD><TD valign=top width=15.4 colspan=2>&nbsp;</TD></TR>
<TR><TD style="border-top:3pt solid #000000; border-bottom:3pt solid #000000" valign=top width=287.867><P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD style="border-top:3pt solid #000000; border-bottom:3pt solid #000000" valign=top width=81.467><P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center><B>2005</B></P>
</TD><TD style="border-top:3pt solid #000000; border-bottom:3pt solid #000000" valign=top width=87.6><P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center><B>2004</B></P>
</TD><TD style="border-top:3pt solid #000000; border-bottom:3pt solid #000000" valign=top width=87.6><P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center><B>2005</B></P>
</TD><TD style="border-top:3pt solid #000000; border-bottom:3pt solid #000000" valign=top width=96.867 colspan=3><P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center><B>2004</B></P>
</TD></TR>
<TR><TD valign=top width=287.867><P style="margin:0pt; font-family:Times New Roman; font-size:12pt">Net revenue</P>
</TD><TD valign=top width=81.467><P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center>100.00%&nbsp;</P>
</TD><TD valign=top width=87.6><P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center>100.00%&nbsp;</P>
</TD><TD valign=top width=87.6><P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center>100.00%&nbsp;</P>
</TD><TD valign=top width=96.867 colspan=3><P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center>100.00%&nbsp;</P>
</TD></TR>
<TR><TD valign=top width=287.867><P style="margin:0pt; font-family:Times New Roman; font-size:12pt">Cost of revenue</P>
</TD><TD valign=top width=81.467><P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center>0.00</P>
</TD><TD valign=top width=87.6><P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center>0.00</P>
</TD><TD valign=top width=87.6><P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center>0.00</P>
</TD><TD valign=top width=96.867 colspan=3><P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center>0.00</P>
</TD></TR>
<TR><TD valign=top width=287.867><P style="margin:0pt; font-family:Times New Roman; font-size:12pt">Gross profit</P>
</TD><TD valign=top width=81.467><P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center>100.00</P>
</TD><TD valign=top width=87.6><P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center>100.00</P>
</TD><TD valign=top width=87.6><P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center>100.00</P>
</TD><TD valign=top width=96.867 colspan=3><P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center>100.00</P>
</TD></TR>
<TR><TD valign=top width=287.867><P style="margin:0pt; font-family:Times New Roman; font-size:12pt">Selling, general and administrative</P>
</TD><TD valign=top width=81.467><P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center>38.15</P>
</TD><TD valign=top width=87.6><P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center>122.55</P>
</TD><TD valign=top width=87.6><P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center>49.81</P>
</TD><TD valign=top width=96.867 colspan=3><P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center>71.93</P>
</TD></TR>
<TR><TD valign=top width=287.867><P style="margin:0pt; font-family:Times New Roman; font-size:12pt">Other income: Gain in sale of fixed assets</P>
</TD><TD valign=top width=81.467><P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center>0.00</P>
</TD><TD valign=top width=87.6><P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center>0.00</P>
</TD><TD valign=top width=87.6><P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center>0.00</P>
</TD><TD valign=top width=96.867 colspan=3><P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center>0.00</P>
</TD></TR>
<TR><TD valign=top width=287.867><P style="margin:0pt; font-family:Times New Roman; font-size:12pt">Income from continuing Operations</P>
</TD><TD valign=top width=81.467><P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center>61.85</P>
</TD><TD valign=top width=87.6><P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center>(22.55)</P>
</TD><TD valign=top width=87.6><P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center>50.19</P>
</TD><TD valign=top width=96.867 colspan=3><P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center>28.07</P>
</TD></TR>
<TR><TD valign=top width=287.867><P style="margin:0pt; font-family:Times New Roman; font-size:12pt">Income taxes</P>
</TD><TD valign=top width=81.467><P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center>13.65</P>
</TD><TD valign=top width=87.6><P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center>32.14</P>
</TD><TD valign=top width=87.6><P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center>4.68</P>
</TD><TD valign=top width=96.867 colspan=3><P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center>7.64</P>
</TD></TR>
<TR><TD valign=top width=287.867><P style="margin:0pt; font-family:Times New Roman; font-size:12pt">Net income &nbsp;</P>
</TD><TD valign=top width=81.467><P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center>48.20%</P>
</TD><TD valign=top width=87.6><P style="margin-top:12pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center>(54.69)%</P>
</TD><TD valign=top width=87.6><P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center>45.51%</P>
</TD><TD valign=top width=96.867 colspan=3><P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center>20.43%</P>
</TD></TR>
</TABLE>
<P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
<P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>-12-</B></P>
<BR>
<BR>
<BR>
<BR>
<P style="page-break-before:always; margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">The following table sets forth, for the periods indicated, the percentage relationship of net revenue by principal geographic area to total revenue.</P>
<TABLE style="font-size:10pt" cellspacing=0 align=center><TR><TD style="border-top:3pt solid #000000" valign=top width=287.8><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD style="border-top:3pt solid #000000" valign=top width=169.2 colspan=2><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>Unaudited</B></P>
</TD><TD style="border-top:3pt solid #000000" valign=top width=169.067 colspan=2><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>Unaudited</B></P>
</TD><TD style="border-top:3pt solid #000000" valign=top width=16.733 colspan=2>&nbsp;</TD></TR>
<TR><TD valign=top width=287.8><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD valign=top width=169.2 colspan=2><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>For the Three Months Ended<BR>
September 30,</B></P>
</TD><TD valign=top width=169.067 colspan=2><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>For the Nine Months Ended<BR>
September 30,</B></P>
</TD><TD valign=top width=16.733 colspan=2>&nbsp;</TD></TR>
<TR><TD style="border-top:3pt solid #000000; border-bottom:3pt solid #000000" valign=top width=287.8><P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
</TD><TD style="border-top:3pt solid #000000; border-bottom:3pt solid #000000" valign=top width=81.533><P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center><B>2005</B></P>
</TD><TD style="border-top:3pt solid #000000; border-bottom:3pt solid #000000" valign=top width=87.667><P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center><B>2004</B></P>
</TD><TD style="border-top:3pt solid #000000; border-bottom:3pt solid #000000" valign=top width=87.533><P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center><B>2005</B></P>
</TD><TD style="border-top:3pt solid #000000; border-bottom:3pt solid #000000" valign=top width=98.267 colspan=3><P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center><B>2004</B></P>
</TD></TR>
<TR><TD valign=top width=287.8><P style="margin:0pt; font-family:Times New Roman; font-size:12pt">United States</P>
</TD><TD valign=top width=81.533><P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center>0%&nbsp;</P>
</TD><TD valign=top width=87.667><P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center>0%&nbsp;</P>
</TD><TD valign=top width=87.533><P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center>0%&nbsp;</P>
</TD><TD valign=top width=98.267 colspan=3><P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center>0%&nbsp;</P>
</TD></TR>
<TR><TD valign=top width=287.8><P style="margin:0pt; font-family:Times New Roman; font-size:12pt">United Kingdom and Europe</P>
</TD><TD valign=top width=81.533><P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center>0%</P>
</TD><TD valign=top width=87.667><P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center>0%</P>
</TD><TD valign=top width=87.533><P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center>0%</P>
</TD><TD valign=top width=98.267 colspan=3><P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center>0%</P>
</TD></TR>
<TR><TD valign=top width=287.8><P style="margin:0pt; font-family:Times New Roman; font-size:12pt">Japan and Asia</P>
</TD><TD valign=top width=81.533><P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center>100%</P>
</TD><TD valign=top width=87.667><P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center>100%</P>
</TD><TD valign=top width=87.533><P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center>100%</P>
</TD><TD valign=top width=98.267 colspan=3><P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center>100%</P>
</TD></TR>
<TR><TD valign=top width=287.8><P style="margin:0pt; font-family:Times New Roman; font-size:12pt">Other</P>
</TD><TD valign=top width=81.533><P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center>0%</P>
</TD><TD valign=top width=87.667><P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center>0%</P>
</TD><TD valign=top width=87.533><P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center>0%</P>
</TD><TD valign=top width=98.267 colspan=3><P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center>0%</P>
</TD></TR>
<TR><TD valign=top width=287.8><P style="margin:0pt; font-family:Times New Roman; font-size:12pt">Total</P>
</TD><TD valign=top width=81.533><P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center>100%</P>
</TD><TD valign=top width=87.667><P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center>100%</P>
</TD><TD valign=top width=87.533><P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center>100%</P>
</TD><TD valign=top width=98.267 colspan=3><P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center>100%</P>
</TD></TR>
</TABLE>
<P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Three months ended September 30, 2005 and 2004.</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify><B>Net revenue </B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>For the three months ended September 30, 2005 our royalty revenues increased 68% to $56,972 from $33,874 for the three months ended September 30, 2004. Our revenue for both 2005 and 2004 is derived from a single customer in Japan. While sales of products of that customer that contain our software have been increasing over the last two years the licensing agreement renews annually and the unit fee has been reduced over the past two years. The higher unit sales have been sufficient to offset the decrease in the unit fees however there is no assurance that this trend will continue in future periods. </P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Cost of revenue</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>There is no cost associated with receipt of the royalty revenue in either the three months ended September 30, 2005 or 2004. </P>
<P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
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<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Selling, general and administrative</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>Our selling, general and administrative expense was $21,731 for the three months ended September 30, 2005 compared to $41,513 for the three months ended September 30, 2004. In the three months ended September 30, 2005 and the three months ended &nbsp;September 30, 2004 the expenses consist of processing royalty fees and paying taxes by an outside accounting firm in Japan and the continuing expenses of our corporate office, which is focusing on seeking a reverse merger or other financial transaction for the Company. </P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Other income and expenses</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>We had no other income or expense items in the three months ended September 30, 2005 or 2004.</P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Provision for taxes</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>Commencing in 1995 we 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 we 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. Since we have a substantial Net Operating Loss Carryforward we had no US income tax liability for the three months ended September 30, 2005.</P>
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<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Nine months ended September 30, 2005 and 2004.</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Net revenue </B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>For the nine months ended September 30, 2005 our royalty revenues of $165,951 a 16% increase over our revenues of $142,514 for the nine months ended September 30, 2004. Our revenue for both 2005 and 2004 is derived from a single customer in Japan. While sales of products of that customer that contain our software have been increasing over the last two years the licensing agreement renews annually and the unit fee has been reduced over the past two years. The higher unit sales have been sufficient to offset the decrease in the unit fees however there is no assurance that this trend will continue in future periods. </P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Cost of revenue</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>There is no cost associated with receipt of the royalty revenue in either the nine months ended September 30, 2005 or 2004. </P>
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<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>Our selling, general and administrative expense was $82,651 for the nine months ended September 30, 2005 compared to $102,510 for the nine months September 30, 2004. In the nine months ended September 30, 2005 and the nine months ended &nbsp;September 30, 2004 the expenses consist of processing royalty fees and paying taxes by an outside accounting firm in Japan and the continuing expenses of our corporate office, which is focusing on seeking a reverse merger or other financial transaction for the Company. </P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Other income and expenses</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>We had no other income or expense items in the nine months ended September 30, 2005 or 2004.</P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Provision for taxes</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>Commencing in 1995 we 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 we 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. Since we have a substantial Net Operating Loss Carryforward we had no US income tax liability for the nine months ended September 30, 2005.</P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Liquidity and capital resources </B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>At September 30, 2005 and December 31, 2004 we had working capital of $180,523 and $129,905 and cash and cash equivalents of $250,032 and $190,048.</P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>We generated $84,884 in cash flow from operating activities in the nine months ended September 30, 2005 compared to $21,026 in the nine months ended September 30, 2004. The principal reasons for the increase in cash used in operating activities of $63,858 was the result of a decrease of $8,882 in accounts receivable caused by having only a single customer in 2004, a decrease of $5,463 in prepaid expenses and a decrease of $20,875 in accounts payable. 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 style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>We did not have any investing activities in either of the nine months ended September 30, 2005 or 2004.</P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>We did not have any financing activities in the nine months ended September 30, 2005 but we did retire a related party note of $32,075 in the nine months ended September 30, 2004.</P>
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<P style="page-break-before:always; margin-top:5pt; margin-bottom:5pt; padding-left:54pt; text-indent:-54pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>ITEM 3. QUANTATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK </B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>This report, including Management&#146;s Discussion and Analysis of Financial Condition and Results of Operations, 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 style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify><B>We received a Going Concern opinion from our auditors on our financial statements for the years ended December 31, 2004, 2003 and 2002. Those statements indicate that we have reported losses for two of our last three years and if we do not become profitable our business could be adversely affected.</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>We reported loss of $36,093 in 2002, a profit of $70,032 for 2003 and a profit of $65,124 in 2004. We also have an accumulated deficit of $6,267,607 and a stockholders' equity of $129,905 as of December 31, 2004. 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 style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" 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.</B><FONT FACE="Courier New"><B> </B></FONT></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" 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>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify><B>Our only operating subsidiary lost its major supplier of product in July 2002. </B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>Our NRCJ subsidiary was 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. While the remaining royalty activities from our sole customer continue to increase in unit sales the higher volume is being offset by lower unit prices resulting in a decrease in royalty income over the past year. There is no assurance that the remaining royalty income is sufficient to allow the Company to continue operations. </P>
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<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" 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.</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" 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>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify><B>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.</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>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 style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" 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.</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>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 style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify><B>Trading in our common stock may be limited and could negatively affect the ability to sell your securities.</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>A public market for our common stock has existed only since July 29, 1999, the date of our initial public offering. We do not know how liquid the market for our stock will remain and if the market becomes illiquid, it may negatively affect your ability to resell your securities. </P>
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<P style="page-break-before:always; margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify><B>&nbsp;ITEM 4. CONTROLS AND PROCEDURES </B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify><B>Evaluation of Disclosure Controls and Procedures</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>The Company maintains disclosure controls and procedures designed to ensure information required to be disclosed in Company reports filed under the Securities Exchange Act of 1934, as amended (the Exchange Act), is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed in Company reports filed under the Exchange Act is accumulated and communicated to management, including the Company's Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.</P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>Within 90 days prior to the date of this report the Company's management, under the supervision and with the participation of the Company's Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company's disclosure controls and procedures as of the end of the period covered by this report. Based upon that evaluation, the Company's Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures are effective.</P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>There were no changes in the Company's internal control over financial reporting during the Company's fiscal quarter ending June 30, 2005, that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.</P>
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<P style="page-break-before:always; margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>PART II - OTHER INFORMATION</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>ITEM 1. LEGAL PROCEEDINGS</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>We are not currently involved in any litigation that is expected to have a material adverse effect on our 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>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>ITEM 2. CHANGES IN SECURITIES.</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Not Applicable.</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>ITEM 3. DEFAULTS UPON SENIOR SECURITIES.</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Not Applicable.</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Not Applicable</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>ITEM 5. OTHER INFORMATION.</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Not Applicable.</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Exhibits &#150; </B></P>
<TABLE style="font-size:10pt" cellspacing=0><TR><TD valign=top width=50.267><P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center>31</P>
</TD><TD valign=top width=12.533>&nbsp;</TD><TD valign=top width=565.2><P style="margin:0pt; font-family:Times New Roman">Rule 13a-14(a) Certifications.</P>
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</TD><TD valign=top width=12.533>&nbsp;</TD><TD valign=top width=565.2><P style="margin:0pt; font-family:Times New Roman">Section 1350 Certifications.</P>
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<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Reports on Form 8-K - None</B></P>
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<P style="page-break-before:always; margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>SIGNATURES</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" 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>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Date: October 24, 2005</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>PASW, INC.</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B><U>/s/ </U><I><U>WILLIAM E. SLINEY</U></I></B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>William E. Sliney</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>President and Chief Financial Officer</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>(Duly Authorized Officer and Principal</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Financial and Accounting Officer)</B></P>
<P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt"><B>&nbsp;</B></P>
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<TYPE>EX-31
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<TITLE>Exhibit 31</TITLE>
<META NAME="author" CONTENT="Bill's">
<META NAME="date" CONTENT="10/24/2005">
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<P style="margin:0pt; font-family:Times New Roman" align=right><B>Exhibit 31</B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=right>&nbsp;</P>
<P style="margin:0pt; font-family:Times New Roman" align=center><B>CERTIFICATIONS</B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=center>&nbsp;</P>
<P style="margin:0pt; font-family:Times New Roman">PASW, Inc. - Principal Executive Officer</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
<P style="margin:0pt; font-family:Times New Roman">I, Glenn P. Russell<SMALL>, <BIG>the principal executive officer of PASW, Inc., certify that:</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
<P style="margin:0pt; font-family:Times New Roman">1. I have reviewed this Quarterly Report on Form 10-QSB for the quarter ended September 30, 2005;</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
<P style="margin:0pt; font-family:Times New Roman">2. Based on my knowledge, this 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 report;</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
<P style="margin:0pt; font-family:Times New Roman">3. Based on my knowledge, the financial statements, and other financial information included in this 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 report;</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
<P style="margin:0pt; font-family:Times New Roman">4. The registrant&#146;s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman">(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 report is being prepared;</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman">(b)&nbsp; [Paragraph omitted pursuant to SEC Release Nos. 33-8238 and 34-47986.]</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman">(c) Evaluated the effectiveness of the registrant&#146;s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman">(d) Disclosed in this report any change in the registrant&#146;s internal control over financial reporting that occurred during the registrant&#146;s most recent fiscal quarter (the registrant&#146;s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant&#146;s internal control over financial reporting; and</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
<P style="margin:0pt; font-family:Times New Roman">5. The registrant&#146;s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant&#146;s auditors and the audit committee of registrant&#146;s board of directors (or persons performing the equivalent function):</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman">(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant&#146;s ability to record, process, summarize and report financial information; and</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman">(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant&#146;s internal control over financial reporting.</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
<TABLE style="font-size:10pt" cellspacing=0><TR><TD valign=top width=333.533><P style="margin:0pt; font-family:Times New Roman">Date: October 24, 2005</P>
</TD><TD valign=top width=242.467 colspan=2>&nbsp;</TD></TR>
<TR><TD valign=top width=333.533>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=111.4><P style="margin:0pt; font-family:Times New Roman">/s/ <B><I>Glen P. Russell</I></B></P>
</TD><TD valign=top width=131.067>&nbsp;</TD></TR>
<TR><TD valign=top width=333.533>&nbsp;</TD><TD valign=top width=242.467 colspan=2><P style="margin:0pt; font-family:Times New Roman">Glen P. Russell</P>
</TD></TR>
<TR><TD valign=top width=333.533>&nbsp;</TD><TD valign=top width=242.467 colspan=2><P style="margin:0pt; font-family:Times New Roman">Chairman, and Chief Executive Officer</P>
</TD></TR>
</TABLE>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=center>&nbsp;</P>
<BR>
<BR>
<BR>
<BR>
<P style="page-break-before:always; margin:0pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><B>CERTIFICATIONS</B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=center>&nbsp;</P>
<P style="margin:0pt; font-family:Times New Roman">PASW, Inc. - Principal Financial Officer</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
<P style="margin:0pt; font-family:Times New Roman">I, William E. Sliney<SMALL>, <BIG>the principal financial officer of PASW, Inc., certify that:</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
<P style="margin:0pt; font-family:Times New Roman">1. I have reviewed this Quarterly Report on Form 10-QSB for the quarter ended September 30, 2005;</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
<P style="margin:0pt; font-family:Times New Roman">2. Based on my knowledge, this 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 report;</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
<P style="margin:0pt; font-family:Times New Roman">3. Based on my knowledge, the financial statements, and other financial information included in this 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 report;</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
<P style="margin:0pt; font-family:Times New Roman">4. The registrant&#146;s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman">(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 report is being prepared;</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman">(b)&nbsp; [Paragraph omitted pursuant to SEC Release Nos. 33-8238 and 34-47986.]</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman">(c) Evaluated the effectiveness of the registrant&#146;s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman">(d) Disclosed in this report any change in the registrant&#146;s internal control over financial reporting that occurred during the registrant&#146;s most recent fiscal quarter (the registrant&#146;s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant&#146;s internal control over financial reporting; and</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
<P style="margin:0pt; font-family:Times New Roman">5. The registrant&#146;s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant&#146;s auditors and the audit committee of registrant&#146;s board of directors (or persons performing the equivalent function):</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman">(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant&#146;s ability to record, process, summarize and report financial information; and</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman">(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant&#146;s internal control over financial reporting.</P>
<P style="margin:0pt; padding-left:36pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
<TABLE style="font-size:10pt" cellspacing=0><TR><TD valign=top width=333.533><P style="margin:0pt; font-family:Times New Roman">Date: October 24, 2005</P>
</TD><TD valign=top width=242.467>&nbsp;</TD></TR>
<TR><TD valign=top width=333.533>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=242.467><P style="margin:0pt; font-family:Times New Roman">/s/ <B><I>William E. Sliney</I></B></P>
</TD></TR>
<TR><TD valign=top width=333.533>&nbsp;</TD><TD valign=top width=242.467>&nbsp;</TD></TR>
<TR><TD valign=top width=333.533>&nbsp;</TD><TD valign=top width=242.467><P style="margin:0pt; font-family:Times New Roman">President and Chief Financial Officer</P>
</TD></TR>
</TABLE>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
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<DOCUMENT>
<TYPE>EX-32
<SEQUENCE>3
<FILENAME>exhibit32russellandsliney930.htm
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<TITLE>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EXHIBIT 32</TITLE>
<META NAME="author" CONTENT="Bill's">
<META NAME="date" CONTENT="2005/10/24">
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<BODY style="line-height:12pt; font-size:10pt; color:#000000">
<A NAME="_Aci_Pg1"></A><BR>
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<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>EXHIBIT 32</B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;CERTIFICATION OF CHIEF EXECUTIVE OFFICER</B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to 18 U.S.C. Section 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of PASW, Inc. (the <I>&quot;Company&quot;</I>) hereby certifies that:</P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;</P>
<P style="margin:0pt; padding-left:108pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the accompanying Quarterly Report on Form 10-Q of the &nbsp;Company for the quarter ended September 30, 2005 (the <I>&quot;Report&quot;</I>) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934,as amended; and</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; padding-left:108pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) &nbsp;&nbsp;&nbsp;&nbsp;information contained in the Report fairly presents, in all material respects, the financial condition and results of</P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;operations of the Company.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:-14pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Dated: October 24, 2005 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
<P style="margin:0pt; text-indent:274.8pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">/s/ <B><I>Glenn P. Russell</I></B></P>
<P style="margin-top:0pt; margin-bottom:-14pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
<P style="margin:0pt; text-indent:274.8pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">--------------------------------------</P>
<P style="margin-top:0pt; margin-bottom:-14pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
<P style="margin:0pt; text-indent:274.8pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Glenn P. Russell</P>
<P style="margin-top:0pt; margin-bottom:-14pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
<P style="margin:0pt; text-indent:274.8pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Chief Executive Officer</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 (<I>&quot;Section 906&quot;</I>), or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to PASW, Inc. and will be retained by PASW, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<A NAME="_Aci_Pg2"></A><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>CERTIFICATION OF CHIEF FINANCIAL OFFICER</B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to 18 U.S.C. Section 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of PASW, Inc. (the <I>&quot;Company&quot;</I>) hereby certifies that:</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; padding-left:108pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the accompanying Quarterly Report on Form 10-Q of the Company for the quarter ended September 30, 2005 (the <I>&quot;Report&quot;</I>) fully complies with the requirements of Section 13(a) Section 15(d), as applicable, of the Securities Exchange Act of 1934 as amended; and</P>
<P style="margin:0pt; padding-left:108pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; padding-left:108pt; text-indent:29.4pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">(ii) &nbsp;&nbsp;&nbsp;&nbsp;information contained in the Report fairly presents, in all material respects, the financial condition and results of</P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;operations of the Company.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:-14pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Dated: October 24, 2005 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
<P style="margin:0pt; text-indent:183.2pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">/s/ <B><I>William E Sliney</I></B></P>
<P style="margin-top:0pt; margin-bottom:-14pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>
<P style="margin:0pt; text-indent:183.2pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">-------------------------</P>
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<P style="margin:0pt; text-indent:183.2pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">William E. Sliney</P>
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<P style="margin:0pt; text-indent:183.2pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">President and Chief Financial Officer</P>
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<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 (<I>&quot;Section 906&quot;</I>), or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to PASW, Inc. and will be retained by PASW, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.</P>
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