
Exhibit No. 99.3

                               TECHNEST.COM, INC.

                                  BALANCE SHEET

                                DECEMBER 31, 2000

                                     ASSETS

CURRENT ASSETS:
     Cash and cash equivalents                                $         716,457
     Note receivable - related party                                    100,000
                                                                ----------------
         TOTAL CURRENT ASSETS                                           816,457

PROPERTY AND EQUIPMENT                                                  832,566

INVESTMENTS                                                           4,897,023

OTHER ASSETS                                                              2,179
                                                                ----------------

                                                              $       6,548,225
                                                                ================

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
     Accounts payable                                         $         371,269
     Accrued interest                                                    25,653
     Note payable - current portion                                     300,000
     Deferred revenue                                                    56,425
     Other liabilities                                                   37,381
                                                                ----------------
         TOTAL CURRENT LIABILITIES                                      790,728
                                                                ----------------

NOTES PAYABLE                                                           690,000

STOCKHOLDERS' EQUITY:
     Preferred stock Series A, $.0001 par value;
      authorized shares 50,000,000 shares;
      14,875,000 shares issued and outstanding                            1,488
     Common stock, $.0001 par value;
      authorized shares, 500,000,000 shares;
      70,850,000 shares issued and outstanding                            7,085
     Additional paid-in capital                                      14,873,512
     Common stock subscription receivable                                (7,035)
     Accumulated deficit                                             (9,807,553)
                                                                ----------------
         TOTAL STOCKHOLDERS' EQUITY                                   5,067,497
                                                                ----------------

                                                              $       6,548,225
                                                                ================




                       See notes to financial statements.
<PAGE>

                               TECHNEST.COM, INC.

                             STATEMENT OF OPERATIONS

               FROM MARCH 1, 2000 (Inception) to DECEMBER 31, 2000


REVENUE:
     Realized loss on investments                             $        (286,327)
     Change in unrealized loss on investments                        (8,753,977)
                                                                ----------------
                                                                     (9,040,304)

INTEREST INCOME                                                          38,924

INTEREST EXPENSE                                                        (25,653)

OTHER INCOME                                                            115,347

OPERATING COSTS AND EXPENSES:
     Selling, general and administrative                                799,057
     Depreciation and amortization                                       96,810
                                                                ----------------
                                                                        895,867
                                                                ----------------

NET LOSS                                                      $      (9,807,553)
                                                                ================


                       See notes to financial statements.
<PAGE>
                               TECHNEST.COM, INC.

                  STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY


                                        Preferred stock       Common stock
                                    ---------------------  ---------------------
                                      Shares      Amount   Shares       Amount
                                    ----------    -------- -------     ---------

Balance - March 1, 2000, Inception        -    $     -           -     $   -

 Issuance of
  preferred stock                   14,875,000      1,488        -         -

 Issuance of
  common stock                            -          -     70,850,000    7,085

 Common stock
  subscription receivable                 -          -           -         -

 Net loss                                 -          -           -         -
                                    ----------    -------  ----------- ---------

Balance - December 31, 2000         14,875,000 $   1,488   70,850,000  $ 7,085
                                    ==========    ======== =========== =========


<TABLE>

                                               Additional            Common stock
                                               Paid - in              Subscription       Accumulated
                                                Capital                Receivable          Deficit            Total
                                              -------------         ---------------     --------------     -----------

<CAPTION>
<S>                                                  <C>                   <C>                  <C>           <C>
Balance - March 1, 2000, Inception           $        -                $    -              $      -      $        -

 Issuance of
  preferred stock                              14,873,512                   -                     -         14,875,000

 Issuance of
  common stock                                       -                      -                     -              7,085

 Common stock
  subscription receivable                            -                   (7,035)                  -             (7,035)

 Net loss                                            -                     -                (9,807,553)     (9,807,553)
                                              -------------         ---------------     ---------------    -------------

Balance - December 31, 2000                  $ 14,873,512              $ (7,035)           $(9,807,553)    $5,067,497
                                              =============         ===============     ===============    =============

</TABLE>








                       See notes to financial statements.
<PAGE>
                               TECHNEST.COM, INC.

                             STATEMENT OF CASH FLOWS

               FROM MARCH 1, 2000 (Inception) to DECEMBER 31, 2000


CASH FLOWS FROM OPERATING ACTIVITIES:
 Net loss                                                   $        (9,807,553)
                                                              ------------------
 Adjustments to reconcile net loss
  to net cash used in operating activities:
   Depreciation and amortization                                         96,810
   Unrealized loss on investments                                     8,753,977
   Stock received for services                                         (151,000)

 Changes in assets and liabilities:
  Deposits                                                               (2,179)
  Accounts payable                                                      371,269
  Accrued interest                                                       25,653
  Deferred revenue                                                       56,425
  Other liabilities                                                      37,381
                                                              ------------------
                                                                      9,188,336
                                                              ------------------

NET CASH USED IN OPERATING ACTIVITIES                                  (619,217)
                                                              ------------------

CASH FLOWS FROM INVESTING ACTIVITIES:
 Purchase of property and equipment                                    (929,376)
 Cost of securities sold                                              1,052,925
 Purchase of investments                                             (3,062,925)
                                                              ------------------
NET CASH USED IN INVESTING ACTIVITIES                                (2,939,376)
                                                              ------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
 Issuance of note receivable-related party                             (100,000)
 Proceeds from issuance of common stock                                      50
 Proceeds from issuance of preferred stock                            4,375,000
                                                              ------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES                             4,275,050
                                                              ------------------

NET INCREASE IN CASH                                                    716,457

CASH - BEGINNING OF PERIOD                                                 -
                                                              ------------------

CASH - END OF PERIOD                                        $           716,457
                                                              ==================

SUPPLEMENTAL DISCLOSURE OF CASH FLOW
 INFORMATION:

 Common stock subscription receivable                       $             7,035
                                                              ==================
 Preferred stock issued for receipt of investments          $        10,500,000
                                                              ==================


                       See notes to financial statements.


<PAGE>
                               TECHNEST.COM, INC.

                          NOTES TO FINANCIAL STATEMENTS

               FROM MARCH 1, 2000 (INCEPTION) TO DECEMBER 31, 2000

1.ORGANIZATION

Technest.com,  Inc.  ("Technest")  is a  Delaware  corporation  incorporated  on
January 10,  2000.  Technest is an Internet  technology  company that invests in
development  stage companies with promising  technology  designed for commercial
applications.  Technest  furnishes such companies with seed capital and provides
them access to professional business services and additional support,  including
necessary financing, as they develop and deliver their products to market.

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

          A. Use of  Estimates

          The  preparation of financial  statements in conformity with generally
          accepted  accounting  principles requires management to make estimates
          and  assumptions  that  affect  the  reported  amounts  of assets  and
          liabilities and disclosure of contingent assets and liabilities at the
          date of the financial statements and the reporting amounts of revenues
          and expenses during the reported  period.  Actual results could differ
          from those estimates.

          B. Cash and cash  equivalents

          Technest  considers all highly liquid  temporary cash investments with
          an original  maturity of three  months or less when  purchased,  to be
          cash equivalents.

          C. Security  valuation

          Investments  are carried at fair value,  which for readily  marketable
          securities,  represents  the last reported sales price or bid price on
          the  valuation   date.   Investments  in  restricted   securities  and
          securities  which are not  marketable  are  carried  at fair  value as
          determined in good faith by the Board of Directors, in the exercise of
          its judgment,  after taking into consideration  various indications of
          value  available  to the Board of  Directors.  These values may differ
          significantly from the values that ultimately will be realized.

          D. Service  revenue  recognition

          Revenues are recognized when the services are performed.  Such amounts
          are shown in the financial statements as other income.

          E.  Property and  Equipment

          Property and  equipment are recorded at cost.  Expenditures  for major
          additions and betterment's  are  capitalized.  Maintenance and repairs
          are charged to  operations as incurred.  Depreciation  of property and
          equipment  is  computed  by the  straight-line  method over the assets
          estimated useful lives.  Leasehold improvements are amortized over the
          lesser of the lease  term or the  assets'  useful  life.  Upon sale or
          retirement of plant and  equipment,  the related cost and  accumulated
          depreciation  are removed  from the  accounts  and any gain or loss is
          reflected in operations.

<PAGE>

          F. Fair value of financial instruments

          The carrying amounts reported in the balance sheet for cash,  accounts
          payable  and  accrued  expenses  approximate  fair value  based on the
          short-term  maturity of these  instruments.  Technest's  note  payable
          approximates the fair value of such instrument based upon management's
          best  estimate of interest  rates that would be  available to Technest
          for similar financial arrangements.

          G.  Impairment  of long - lived  assets

          In the event that facts and circumstances indicate that the cost of an
          asset  may be  impaired,  an  evaluation  of  recoverability  would be
          performed.   If  an  evaluation  is  required,  the  estimated  future
          undiscounted cash flows associated with the asset would be compared to
          the asset's  carrying  amount to determine  if a write-down  to market
          value is required.  Technest believes that the balance of long - lived
          assets in the accompanying balance sheet is appropriately valued.

          H.Income Taxes

          Technest follows Statement of Financial Accounting Standards No. 109 -
          Accounting for Income Taxes,  which  requires  recognition of deferred
          tax assets and liabilities for the expected future tax consequences of
          events that have been  included  in the  financial  statements  or tax
          returns.  Under this method,  deferred tax assets and  liabilities are
          based on the differences between the financial statement and tax bases
          of assets and  liabilities  using  enacted tax rates in effect for the
          year in which the differences are expected to reverse.

          I.Recently  issued   accounting   pronouncements

          Technest adopted  Statement of Financial  Accounting  Standard No. 133
          ("SFAS No. 133"),  "Accounting for Derivative  Instruments and Hedging
          Activities"  for the year  ended  December  31,  2000.  SFAS  No.  133
          establishes a new model for  accounting  for  derivatives  and hedging
          activities and  supersedes and amends a number of existing  standards.
          The  application  of the new  pronouncement  did not  have a  material
          impact on the Company's financial statements.

3.NOTE RECEIVABLE

Technest has a note receivable  from one of its investees  ("Maker") of $266,000
of which  $100,000 was  receivable at December 31, 2000. The note bears interest
at prime and is due on the  earlier of (a) June 12, 2001, or (b) the  receipt by
the Maker of equity in excess of $500,000 in the aggregate.  The note is secured
by the  assets  of the  Maker.  The  note  may be  converted  at any time at the
Technest's sole option, into the number of shares of Class A Voting common stock
of Maker equal to the quotient of the  principal  amount  outstanding  hereunder
together  with all accrued  interest  divided by the lessor of (i) $1.00 or (ii)
the lowest share price for any equity  securities  issued and sold by Maker from
the date hereof.

<PAGE>

4.INVESTMENTS

<TABLE>
                                                                        December 31, 2000
                                               ---------------------------------------------------------------------
                 Security                           Shares                   Cost                   Fair value
-------------------------------------------    -----------------      --------------------      --------------------
<CAPTION>
<S>                                                     <C>                        <C>                       <C>
Common stock
   Lecstar Communications Corp                          836,000  $              2,090,000  $                321,023
   Realestate.com, Inc.                                 229,358                 1,000,000                         -
   USA Meats, Inc.                                      250,000                   250,000                         -
   Designeroutlets.com, Inc.                                550                   385,000                   385,000
   NanoUniverse Plc                                     500,000                   500,000                   272,000
   Dynax Solution, Inc.                                 375,000                   375,000                   375,000
   Cyberboard.com, Corp                                  71,429                   250,000                         -
   Corpfin.com, Inc.                                  1,305,000                 1,305,000                   600,000
   Crystal Insight, Inc.                                 50,000                   270,000                   270,000
                                                                      --------------------      --------------------
      Total common stock                                         $              6,425,000  $              2,223,023
                                                                      ====================      ====================
Preferred stock
   LicensingZone.com, Inc.                            3,450,000  $              1,531,000  $                      -
   Allure Fusion Media                                2,700,000                 2,370,000                 2,370,000
   eCompanyStore.com, Inc.                               50,000                   450,000                   132,000
   Coax Corporation                                     213,068                   375,000                         -
   Realestate.com, Inc.                                   2,294                 1,000,000                         -
   RealtyLogix, Inc.                                    400,000                 1,000,000                   172,000
                                                                      --------------------      --------------------
      Total preferred stock                                      $              6,726,000  $              2,674,000
                                                                      ====================      ====================
Total Common and Preferred Stock                                 $             13,151,000  $              4,897,023
                                                                      ====================      ====================
</TABLE>


Investment in Licensing Zone.com,  Inc.  ("Licensing Zone") - Technest purchased
3,450,000  shares of Series A preferred  stock of Licensing Zone for $1,800,000.
The purchase  price  consisted of $1,500,000 in cash and $300,000 in the form of
services provided by Technest. For accounting purposes the value of the services
were  recorded  at  $31,000,  which  represents  the fair value of the  services
rendered.  On  December  31,  2000,  Technest  determined  the fair value of the
Licensing Zone investment was $-0-.


<PAGE>

Investment  in Allure  Fusion Media  ("Allure") - Technest  purchased  2,700,000
shares of Series A preferred stock of Allure for $2,700,000.  The purchase price
consisted  of  $2,250,000  comprising  of $600,000 in cash,  promissory  note of
$1,650,000,  and  $450,000 in the form of services  provided  by  Technest.  For
accounting purposes, the value of the services were recorded at $120,000,  which
represents  the fair  value of the  services  rendered.  On  December  31, 2000,
Technest determined the fair value of the Allure investment was $2,370,000.

The balance of the  promissory  note to Allure is $990,000 on December 31, 2000.
On May 30, 2001,  Technest paid  $300,000 and the remaining  balance of $690,000
matures on May 16, 2003.

The note bears  interest at 8% per annum or the  maximum  rate  permitted  under
applicable law. On December 31, 2000, the note has accrued interest of $25,653.

5.PROPERTY AND EQUIPMENT

         Furniture and Fixtures               $                 397,227
         Computer equipment                                     212,329
         Capitalized software                                    26,609
         Telephone system                                        38,534
         Leasehold improvements                                 233,981
         Office equipment                                        11,700
         Security system                                          8,996
                                                   ---------------------
                                                                929,376
         Less: accumulated depreciation                         (96,810)
                                                   ---------------------
                                              $                 832,566
                                                   =====================

6.COMMITMENTS

Technest  leases office space under a five year operating  lease which commenced
on April 17, 2000, and was amended for  additional  space on September 17, 2000.
The lease expires in April 2005, unless sooner terminated as provided for in the
lease. The agreement contains annual rent increases for inflation purposes. Rent
expense from March 1, 2000 (inception), to December 31, 2000, was $358,028.


<PAGE>


The future minimum rental payments as of December 31, 2000, are as follows:

                      2001                               $             660,454
                      2002                               $             680,268
                      2003                               $             700,676
                      2004                               $             721,696
                      2005                               $             242,924

7.STOCKHOLDERS' EQUITY

Technest is  authorized to issue  500,000,000  shares of common stock with a par
value of $.0001. Technest issued 70,850,000 shares at par value to its founders.

Technest  is  authorized  to issue  50,000,000  shares of  Series A  convertible
preferred  stock  ("Series  A"),  $.0001 par value.  The holder of the preferred
stock shall have the right at such holders' option,  at any time to convert all,
but no less  than  all  such  shares  of  Series  A into  common  shares  at the
conversion  price of $1.00 per share.  The Series A shall bear  dividends  at an
annual rate of .25% of the subscription  price when and if declared by the Board
of Directors of Technest.

In the event of any  liquidation  or  dissolution  of  Technest,  the holders of
Series A shall be entitled to be paid the aggregate  subscription  prices of all
the outstanding Series A preferred stock.

Technest  issued to its founders  14,875,000  shares of Series A preferred stock
for the total  consideration  of  $14,875,000.  A portion  of the  consideration
received  represented  the fair value of investments  in unrelated  companies of
$10,500,000.

8.INCOME TAXES

Technest has net operating loss carryforwards available for income tax reporting
purposes of approximately $1,000,000,  in the aggregate,  expiring through 2019,
which  gives rise to a deferred  income tax asset of  approximately  $340,000 at
December 31, 2000. In accordance with Section 382 of the Internal  Revenue Code,
utilization  of the net  operating  loss  carryfowards  may be limited  based on
ownership changes which have occurred or may occur. Technest has recorded a 100%
valuation  allowance on the net deferred tax asset since the ability of Technest
to utilize the  deferred  tax asset is  uncertain.  The  difference  between the
statutory  tax  rate of 34%  and  the  effective  rate  of 0%  reflected  in the
accompanying  financial  statements  is  due to the  increase  in the  valuation
allowance.



