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As filed with the Securities and Exchange Commission on May 15, 2003.
 

ENERGY EXPLORATION TECHNOLOGIES Consolidated Balance Sheets (expressed in U.S. dollars)
			March 31, 2003	December 31, 2002
			(unaudited)
Assets
Current assets:
	Cash and cash equivalents		$ 429,919	$ 585,070
	Accounts receivable		1,702,267	328,174
	Due from officers and employees		2,199	5,004
	Prepaid expenses and other		48,732	73,315
			2,183,117	991,563
Note receivable from officer [note 4]			37,271	34,212
Aircraft and flight equipment held for sale [notes 2 and 5]			21,069	22,985
Oil and natural gas properties, on the basis of full cost accounting,
	net of depletion and impairments [notes 2 and 6]		1,563,364	2,763,919
Other property and equipment, net of accumulated depreciation,
	amortization and impairment [notes 2 and 7]		214,866	206,146
			$ 4,019,687	$  4,018,825
Liabilities And Shareholders' Equity
Current liabilities:
	Trade payables		$ 108,599	$  68,555
	Wages and employee benefits payable		24,269	5,738
	Other accrued liabilities		61,893	74,740
			194,761	149,033
Contingencies, continuing operations and commitments [notes 1 and 12]			--	--
Shareholders' equity:
	Series 'A' convertible preferred stock; par value $0.001 per share:
		liquidation preference $7.50 per share
		800,000 shares authorized and
		800,000 shares issued as of March 31, 2003 and December 31, 2002 [note 9]	800	800
	Common stock, par value $0.001 per share:
		50,000,000 shares authorized; 16,971,153 shares issued as of March
		31, 2003 and December 31, 2002	16,971	16,971
	Additional paid-in capital		24,086,183	24,077,655
	Accumulated deficit		(20,238,792)	(20,041,865)
	Accumulated other comprehensive loss		(40,236)	(183,769)
			3,824,926	3,869,792
			$   4,019,687	$  4,018,825

ENERGY EXPLORATION TECHNOLOGIES Explanatory Notes To Consolidated Financial Statements (expressed in U.S. dollars) (unaudited)

1. ORGANIZATION AND ABILITY TO CONTINUE OPERATIONS

Energy Exploration Technologies ("we", "our company" or "NXT") was incorporated under the laws of the State of Nevada on September 27, 1994. We are a technology-based reconnaissance exploration company which utilizes our proprietary stress field detection (SFD) remote-sensing airborne survey technology to quickly and inexpensively identify and high-grade oil and natural gas prospects. We conduct our reconnaissance exploration activities, as well as land acquisition, drilling, completion and production activities through our wholly-owned subsidiaries--NXT Energy USA Inc. ("NXT Energy USA") and NXT Energy Canada Inc. ("NXT Energy Canada"), in the United States and Canada, respectively. NXT Aero USA Inc. ("NXT Aero USA") and NXT Aero Canada Inc. ("NXT Aero Canada") are the two subsidiaries through which we conduct the aerial surveys.

For the quarter ended March 31, 2003, we incurred a loss of $196,927 and our ability to continue as a going concern will be dependent upon successfully identifying hydrocarbon bearing prospects, and financing, developing, extracting and marketing oil and natural gas from these prospects for a profit. We anticipate that we will continue to incur further operating losses until such time as we receive additional revenues from increased production with respect to currently held prospects or through prospects we identify and exploit for our own account.

We have taken steps to significantly cut-back our administration, exploration and research and development costs from approximately $250,000 per month to approximately $80,000 per month through a number of cost-saving measures. We have sold our U.S. properties and are expanding our exploration efforts in Canada. We are also investigating the use of our technology in other countries.

We can give no assurance that any or all pending projects will generate sufficient revenues to cover our operating or other costs. Should this be the case, we would be forced, unless we can raise sufficient additional working capital, to suspend our operations, and possibly even liquidate our assets and wind-up and dissolve our company.

These consolidated financial statements are prepared using generally accepted accounting principles that are applicable to a going concern, which assumes the realization of assets and the settlement of liabilities in the normal course of operations. Should this assumption not be appropriate, adjustments in the carrying amounts of the assets and liabilities to their realizable amounts and the classification thereof will be required and these adjustments and reclassifications may be material.

2. SIGNIFICANT ACCOUNTING POLICIES

Basis Of Presentation

We have prepared these consolidated financial statements for our three-month interim periods as at and ended March 31, 2003 and 2002 in accordance with accounting principles generally accepted in the United States for interim financial reporting. While these financial statements for these interim periods reflect all normal recurring adjustments which, in the opinion of our management, are necessary for fair presentation of the results of the interim period, they do not include all of the information and notes required by accounting principles generally accepted in the United States for complete financial statements. Refer to our consolidated financial statements included in our annual report on Form 10-K for our fiscal year ended December 31, 2002. 

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Consolidation

We have consolidated the accounts of our wholly-owned subsidiaries with those of NXT in the course of preparing these consolidated financial statements. All significant inter-company balances and transactions amongst NXT and its subsidiaries have been eliminated as a consequence of the consolidation process, and are therefore not reflected in these consolidated financial statements.

Estimates And Assumptions

The preparation of these consolidated financial statements in accordance with generally accepted accounting principles in the United States requires our 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 these consolidated financial statements and the reported amount of revenues and expenses during the reporting periods. Actual results may differ from those estimates.

Cash And Cash Equivalents

For purposes of preparing the consolidated balance sheets and statements of cash flows contained in these

consolidated financial statements, we consider all investments with original maturities of ninety days or less to constitute "cash and cash equivalents".

Debt Issuance Costs

We amortize debt issuance costs on a straight-line basis over the life of the related debt.

Fair Value Of Financial Instruments

Our financial instruments consist of cash and cash equivalents, accounts receivable, notes receivable, trade payables, wages and employee benefits payable, accrued liabilities and long-term debt. The book values of these financial instruments, other than long-term debt, approximates their fair values due to their short-term to maturity and similarity to current market rates. It is the opinion of our management that we are not exposed to significant interest, currency or credit risks arising from these financial instruments.

Aircraft And Flight Equipment Held For Sale

Both aircraft were sold in 2002. We carry our flight equipment held for sale at the lower of the carrying amount or the fair value less cost to sell. These assets are not depreciated as long as they are held for sale.

Oil And Natural Gas Properties

We follow the full cost method of accounting for oil and natural gas properties and equipment whereby we capitalize all costs relating to our acquisition of, exploration for and development of oil and natural gas reserves. These capitalized costs include:

-	land acquisition costs;
-	geological and geophysical costs;
-	costs of drilling both productive and non-productive wells;
-	cost of production equipment and related facilities; and
-	various costs associated with evaluating petroleum and natural gas properties for potential acquisition.

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We only capitalize overhead that is directly identified with acquisition, exploration or development activities. All costs related to production, general corporate overhead and similar activities are expensed as incurred.

Under the full cost method of accounting, capitalized costs are accumulated into cost centers on a country-by-country basis. These costs, plus a provision for future development costs (including estimated dismantlement, restoration and abandonment costs) of proved undeveloped reserves, are then depleted and depreciated using the unit-of-production method, based on estimated proved oil and gas reserves as determined by independent engineers where significant. For purposes of the depletion and depreciation calculation, proved oil and gas reserves are converted to a common unit of measure on the basis of their approximate relative energy content. NXT was a development stage enterprise until 2002 and any net revenues received prior to achieving commercial production were accounted for as an adjustment to capitalized costs. NXT achieved commercial operations at the beginning of the second quarter of 2002.

In applying the full cost method of accounting, capital costs in each cost center less accumulated depletion and depreciation and related deferred income taxes are restricted from exceeding an amount equal to the sum of the present value of their related estimated future net revenues discounted at 10% less estimated future expenditures, and the lower of cost or estimated fair value of unproved properties included in the costs being amortized, net of related tax effects. Should this comparison indicate an excess carrying value, a write-down would be recorded.

The carrying values of unproved oil and natural gas properties, which are excluded from the depletion calculation, are assessed on a quarterly basis to ascertain whether any impairment in value has occurred. This assessment typically includes a determination of the anticipated future net cash flows based upon reserve potential and independent appraisal where warranted. Impairment is recorded if this assessment indicates the future potential net cash flows are less than the capitalized costs.

All recoveries of costs through the sale or other disposition of oil and gas properties and equipment are accounted for as adjustments to capitalized costs, with no gain or loss recorded, unless the sale or disposition involves a significant change in the relationship between costs and the value of proved reserves or the underlying value of unproved property, in which case the gain or loss is computed and recognized.

We conduct oil and natural gas exploration, drilling, development and production activities through joint venture partners. These consolidated financial statements reflect only our proportionate interest in these activities.

Other Property And Equipment

We carry our other capitalized property and equipment at cost, and depreciate or amortize them over their estimated service lives using the declining balance method as follows:

Aircraft	5%
Computer and SFD system equipment	30%
Computer and SFD system software	100%
Equipment	20%
Furniture and fixtures	20%
Flight equipment	10%
Leasehold improvements	20%
Tools	20%
Vehicle	30%

When we retire or otherwise dispose of our other capitalized property and equipment, we remove their cost and related accumulated depreciation or amortization from our accounts, and record any resulting gain or loss in the results of operations for the period. Our management periodically reviews the carrying value of our property and equipment to ensure that any permanent impairment in value is recognized and reflected in our results of operations.

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Revenue Recognition

Revenue associated with sales of crude oil and natural gas is recorded when title passes to the customer.

Research And Development Expenditures

We expense all research and development expenditures we incur to develop, improve and test our SFD survey system and related components, including allocable salaries.

Survey Support Expenditures

We expense all survey support expenditures we incur, after netting costs which are reimbursable by our joint venture partners. Survey support expenditures consist primarily of the cost, including allocable salaries, to:

-	conduct field evaluations to evaluate the SFD survey system; and
-	develop, organize, staff and train our survey and interpretation operational functions.

Survey Operations And Data Analysis Expenditures

We expense all survey operations and data analysis expenditures we incur, after netting costs which are reimbursable by our joint venture partners. Survey operations and data analysis expenditures consist primarily of:

-	aircraft operating costs, travel expenses and allocable salaries of our personnel while on survey assignment; and
-	allocable salaries of our personnel while interpreting SFD data.

Foreign Currency Translation

Our only operations outside of the United States are in Canada. Foreign currency translation adjustments resulting from the translation of the financial statements of our Canadian subsidiaries, whose functional currency is Canadian dollars, into U.S. dollar equivalents for purposes of consolidating our financial statements, are included in other comprehensive loss. For purposes of consolidation, we use the following methodology to convert Canadian dollar denominated accounts and transactions into U.S. dollars:

-	all asset and liability accounts are translated into U.S. dollars at the rate of exchange in effect as of the end of the applicable fiscal period;
-	all shareholders' equity accounts are translated into U.S. dollars using historical exchange rates; and
-	all revenue and expense accounts are translated into U.S. dollars at the average rate of exchange for the applicable fiscal period.

We record the cumulative gain or loss arising from the conversion of the noted Canadian dollar denominated accounts and transactions into U.S. dollars as a foreign currency translation adjustment as a component of accumulated other comprehensive income or loss for that period.

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Basic And Diluted Loss Per Share

Our basic loss per share is computed in accordance with SFAS No. 128, "Earnings Per Share", by dividing the net loss for the period by the weighted average number of common shares outstanding for the period. Our diluted loss per share is computed, also in accordance with SFAS No. 128, by including the potential dilution that could occur if holders of our dilutive securities were to exercise or convert these securities into common shares.

In calculating our basic and diluted loss per share, we take into consideration deemed distributions analogous to the declaration of a dividend attributable to the beneficial conversion features affording a discount or benefit to the holders of our securities. See note 9.

Stock-Based Compensation For Employees And Directors

In accounting for the grant of our employee and director stock options, we have elected to follow Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" ("APB 25"), and related interpretations. Under APB 25, companies are not required to record any compensation expense relating to the grant of options to employees or directors where the awards are granted upon fixed terms with an exercise price equal to fair value and the only condition of exercise is continued employment. See note 10.

Recent Accounting Pronouncements

In August 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement Obligations". SFAS No. 143 requires that the fair value of a liability for an asset retirement obligation be recognized in the period in which it is incurred if a reasonable estimate of fair value can be made. The associated asset retirement costs are capitalized as part of the carrying amount of the long-lived asset. We were required to adopt the provisions of SFAS No. 143 on January 1, 2003. We have sold our U.S. properties, along with the associated abandonment liabilities, and we have no retirement liabilities associated with the Canadian properties and therefore this SFAS has no impact on us at this time.

3. DISCONTINUED OPERATIONS

In January 2003, we adopted a formal plan to divest our U.S. oil and gas propertiesOn May 9, 2003 we closed a sale transaction with our U.S. joint venture partner to sell the properties for total consideration of $1,450,000 with proceeds of $720,000 in cash and the redemption of all the outstanding preferred shares. The effective date of the transaction was March 1, 2003. For reporting purposes, the results of operations and the financial position of the properties have been presented as discontinued operations. Accordingly, prior period financial statements have been reclassified to reflect this change.

Income (loss) on discontinued operations includes a gain on sale of the properties of $175,685 and net income from the properties for the two month period up to the effective date of March 1, 2003 of $22,915.

Included in accounts receivable at March 31, 2003 is $1,450,000 plus trade accounts receivable related to our U.S. properties.

4. NOTE RECEIVABLE FROM OFFICER

In September 1998, we loaned the sum of CDN $54,756 (US $35,760 as of that date) to one of our officers in connection with his relocation to Calgary, Alberta. Pursuant to the terms of an underlying promissory note, the officer was required to repay the loan on a monthly basis, with a balloon payment due on October 3, 2003. The officer left our company in 2002 and will repay the outstanding balance on October 3, 2003.

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5. AIRCRAFT AND FLIGHT EQUIPMENT HELD FOR SALE

In December 2001, management decided to place on the market our two aircraft and related flight equipment in order to decrease our operating costs. The Piaggio Avanti P180 aircraft was sold in the second quarter of 2002 and the remaining aircraft was sold in the fourth quarter of 2002.

Summarized below are our capitalized costs for the aircraft and flight equipment held for sale:

		March 31,	December 31,
		2003	2002
Flight equipment held for sale		$ 106,328	$  108,244
Less accumulated write-down		(85,259)	(85,259)
	Net aircraft and flight equipment held for sale	$ 21,069	$ 22,985

6. OIL AND NATURAL GAS PROPERTIES

Summarized below are the oil and natural gas property costs we capitalized for the three months ended March 31, 2003 and 2002 and as of March 31, 2003 and December 31, 2002:

		Three Months Ended March 31,			As of March 31, 2003	As of December 31, 2002
		2003	2002
Acquisition costs		$ 50,051	$  19,610		$ 1,318,718	$  1,268,667
Exploration costs		263,849	599,051		7,655,727	7,391,878
Development costs		--	5,983		83,234	83,234
	Oil and natural gas properties	313,900	624,644		9,057,679	8,743,779
Less impairment		(219,529)	(11,066)		(5,831,916)	(5,612,387)
Less dispositions		(1,280,309)	-		(1,507,660)	(227,351)
Less depletion		(14,617)	(4,153)		(154,739)	(140,122)
	Net oil and natural gas properties	$(1,200,555)	$  609,425		$1,563,364	$ 2,763,919

Net oil and natural gas property costs at March 31, 2003 are comprised of  $187,146 ($781,446 at December 31, 2002) of proved property costs and $1,376,218 ($1,982,473 at December 31, 2002) of unproved property costs. At March 31, 2003 there were no indications of impairment of our Canadian full cost center.

The impairment of oil and natural gas properties also includes the write-down of the cost of drilling and completing wells which are either non-commercial or which we are unable to complete for technical reasons. While, as noted below, our management believes in the prospective commercial viability and non-impairment of the overall prospects of which each of these wells are a part and is continuing active exploration and development activities with respect to each of these prospects, we have nevertheless written-off these individual well costs as an impairment cost since this determination was made prior to the establishment of proved reserves.

At the end of each quarter, our management performs an overall assessment of each of our unproved oil and natural gas properties to determine if any of these properties has been subject to any impairment in value (see note 2). Based upon these evaluations, our management has determined that each of our oil and natural gas properties continued to have prospective commercial viability as of these dates. While we are currently conducting active exploration and development programs with respect to each of these unproved oil and natural gas properties, we anticipate that all of these properties will be evaluated and the associated costs transferred into the amortization base or be impaired over the next five years.

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7. OTHER PROPERTY AND EQUIPMENT

Summarized below are our capitalized costs for other property and equipment as of March 31, 2003 and December 31, 2002:

		March 31, 2003	December 31, 2002
Computer and SFD equipment		$ 288,225	$  268,254
Computer and SFD software		126,128	118,470
Equipment		81,514	80,912
Furniture and fixtures		178,400	165,984
Leasehold improvements		210,644	195,983
SFD survey system (including software)		126,844	115,471
Tools		1,675	1,559
Vehicle		18,827	18,828
	Other property and equipment	1,032,257	965,461
Less accumulated depreciation, amortization and impairment		(817,391)	(759,315)
	Net other property and equipment	$ 214,866	$  206,146

8. LONG-TERM DEBT

On May 1, 2002, we completed the sale of our Piaggio Avanti P180 aircraft to a third party and used the proceeds to settle the principal and interest due on this loan in full. See note 5. We also expensed the remaining unamortized debt issuance costs of $22,805 during 2002.

9. PREFERRED STOCK

The series 'A' preferred shares are not entitled to payment of any dividends, although they are entitled under certain circumstances to participate in dividends on the same basis as if converted into common shares. Each series 'A' preferred share carries a $7.50 liquidation preference should our company wind-up and dissolve. Each series 'A' preferred share is convertible by the holder into common shares based upon a $7.50 per share conversion price, subject to adjustment should NXT sell common shares or common share purchase options or warrants at prices less than $7.50 per share in specified circumstances.

The preferred shares were all redeemed and cancelled effective May 9, 2003 as part of the compensation received for the sale of the U.S. properties.

10. PERFORMANCE WARRANTS

On August 1, 1996, we granted a performance-based contractual right to acquire NXT warrants to the licensor of our SFD technology, Momentum Resources Corporation ("Momentum Resources"), in connection with the amendment of our exclusive SFD technology license with Momentum Resources to use the SFD technology for hydrocarbon exploration. The primary purpose of the amendment was to indefinitely extend the termination date of the license. Pursuant to this contractual right, Momentum Resources is entitled to a separate grant of warrants entitling it to purchase 16,000 common shares at the then current trading price for each month after December 31, 2000 in which production from SFD-identified prospects during that month exceeds 20,000 barrels of hydrocarbons. Momentum Resources has not earned any warrants under the SFD technology license as of March 31, 2003.

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11. EMPLOYEE AND DIRECTOR OPTIONS

We have summarized below all outstanding options under our various stock option plans and arrangements as of March 31, 2003:

				As of March 31, 2003
Stock Option Plan		Grant Date	Exercise Price	Outstanding	Vested
Independent Grants
		January 4, 2001 (1)	$2.00	30,000	30,000
		January 4, 2001 (1)	$2.00	45,000	45,000
		January 4, 2001 (1)	$2.00	45,000	45,000
1997 Employee Stock Option Plan
		January 4, 2001 (1)	$2.00	25,000	25,000
		January 4, 2001 (1)	$2.00	58,542	58,542
		January 4, 2001 (1)	$2.00	8,000	8,000
		January 4, 2001 (1)	$2.00	100,000	60,000
		January 4, 2001 (1)	$2.00	20,000	15,000
		January 4, 2001 (1)	$2.00	41,750	31,750
		January 4, 2001 (1)	$2.00	9,000	9,000
		January 4, 2001 (1)	$2.00	18,000	18,000
		January 4, 2001 (1)	$2.00	30,000	12,000
		January 4, 2001 (1)	$2.00	35,000	35,000
		January 4, 2001 (1)	$2.00	25,000	25,000
		January 4, 2001 (1)	$2.00	7,750	7,750
		December 27, 2000	$4.125	15,000	9,000
		February 1, 2001	$2.00	6,000	6,000
		July 5, 2001	$2.00	30,000	10,000
		August 13, 2002	$0.38	110,000	0
		September 20, 2002	$0.29	33,000	0
		March 27, 2003	$0.14	60,000	0
1999 Executive Stock Option Plan
		May 1, 1999	$2.00	520,800	520,800
2000 Directors Stock Option Plan
		May 15, 2000	$2.00	40,000	40,000
		April 17, 2000	$2.00	70,000	60,000
		August 13, 2002	$0.38	120,000	0
		September 20, 2002	$0.29	10,000	0
				1,512,842	1,070,842
(1)	Effective January 4, 2001, the recipients elected to cancel these original grants and to receive new options generally having the same terms as the original grant, except that the exercise price for the new options would be fixed at the closing price for NXT common shares as of July 5, 2001, subsequently determined to be $2.00.

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The employee options outstanding as of March 31, 2003 vest over three to five years from the grant date, depending upon the recipient, based upon the continued provision of services as an employee. The director options vest one-third each on the first through third anniversaries of the grant date, respectively, based upon the continued provision of services as a director. Both the employee and director options generally lapse, if unexercised, five years from the date of vesting.

12. COMMITMENTS

The lease for the principal offices expired on January 31, 2003. A new sub-lease from another tenant has been negotiated with a term of eighteen months ending July 31, 2004. The space is approximately 5,500 square feet and the monthly cost is about $10,000 CDN.

13. INVESTOR RELATIONS OPTIONS

On May 15, 2001, as additional compensation to our investor relations consultant pursuant to an investor and public relations services agreement, we granted that consultant options to purchase 155,000 common shares at $2.50 per share. The underlying agreement provided that 50,000 options would vest immediately, and an additional 35,000 options would vest upon each of the first, second and third anniversary dates of the agreement, respectively, even if the agreement was not subsequently renewed by those dates so long as NXT has not terminated this agreement for "good cause" as defined in the agreement. These options lapse, to the extent vested and unexercised, five years after the date of vesting. Pursuant to SFAS No. 123, for our three month period ended March 31, 2003, we recorded compensation expense, as part of administrative expenses, determined in accordance with the Black-Scholes option pricing model in the amount of $8,528 ($8,534 for our three month period ended March 31, 2002) in connection with the grant and vesting of these options. We have sent notice of our intent not to renew the agreement at May 15, 2003.

14. SEGMENT INFORMATION

-	revenues we have received during the period from our external customers, allocated amongst the geographic areas in which the revenue was generated;
-	revenues we have received during the period from sources other than our external customers, allocated amongst the geographic areas in which the revenue was generated; and
-	our net loss for the period, allocated amongst the geographic areas in which the revenue and associated expenses were generated.

Three Months Ended	United States	Canada	Total
March 31, 2003:
Revenues from oil and natural gas production	$ -	$ (19,561)	$ (19,561)
Revenues from other sources	1,079	12,378	13,458
Net loss from continuing operations	$ (60,613)	$ (334,914)	$ (395,527)
Income (loss) from discontinued operations	$ 198,600	$ -	$ 198,600
March 31, 2002:
Revenues from oil and natural gas production	$ -	$ 10,718	$ 10,718
Revenues from other sources	-	478	478
Net loss from continuing operations	$ (410,863)	$ (125,600)	$ (536,463)
Income (loss) from discontinued operations	$ (256,753)	$ -	$ (256,753)

Assets As Of	United States	Canada	Total
March 31, 2003	$ 2,029,045	$ 1,990,642	$ 4,019,687
December 31, 2002	$  1,682,768	$  2,336,057	$  4,018,825

In preparing the above tables, we have eliminated all inter-segment revenues, expenses and assets.

In this report we have made a number of statements, which we refer to as "forward-looking statements", which generally relate to our present expectations or predictions as to the possible occurrence of future events or the existence of trends and factors that may impact our future plans and operating results. These forward-looking statements are based upon assumptions and analyses made by us in the context of our current business plan and information currently available to us and in light of our experience and perceptions of historical trends, current conditions and expected future developments and other factors we believe to be appropriate in the circumstances.

-	Administrative costs decreased $14,072 (5%) in 2003 compared to the same period in 2002 due to the reduced activities.