NASCENDO S.A.

(Formerly Nascent Advisor s.a.)

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD OF SEVEN MONTHS ENDED JUNE 30, 2000

TOGETHER WITH AUDITOR’S REPORT

To the Shareholders’ of

Nascendo S.A.:

We have audited the consolidated balance sheet of Nascendo S.A. (formerly Nascent Advisor S.A.) as at June 30, 2000 and the consolidated statements of income, changes in shareholders’ equity and cash flows for the period of seven months then ended.  These financial statements are the responsibility of the Company’s management.  Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with Canadian generally accepted auditing standards.  Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.

In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the Company as at June 30, 2000 and the results of its operations and its cash flows for the period of seven months then ended in accordance with Canadian generally accepted accounting principles.

September 30, 2000                                                         General Partnership

                                                                                          Chartered Accountants

NASCENDO S.A.

CONSOLIDATED balance sheet

JUNE 30, 2000

(In Canadian dollars)

ASSETS

LIABILITIES AND SHAREHOLDERS’ EQUITY

Approved on behalf of the Board:

_____________________________, Director

_____________________________, Director

NASCENDO S.A.

CONSOLIDATED STATEMENT OF INCOME

for the PERIOD OF SEVEN MONTHS ended JUNE 30, 2000

(In Canadian dollars)

NASCENDO S.A.

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

for the PERIOD OF SEVEN MONTHS ended JUNE 30, 2000

(In Canadian dollars)

NASCENDO S.A.

CONSOLIDATED statement of cASH FLOWS

for the PERIOD OF SEVEN MONTHS ended JUNE 30, 2000

(In Canadian dollars)

           1. STATUTES OF INCORPORATION AND NATURE OF ACTIVITIES

Nascendo S.A. (the “Company, formerly Nascent Advisor S.A.”) was incorporated on December 15, 1999 as an International Business Company in Saint-Vincent and the Grenadines.  The Company, a venture capital investment corporation, is engaged in the business of providing financing, selling, marketing and other services to new technology companies.

The Company manages its venture investments to achieve long-term capital growth.  However, the opportunity to realize capital gains depends on a number of factors and management cannot predict the future date at which the Company will divest of an investment in its portfolio.  Therefore, fair value does not reflect an attempt by management of the Company to estimate the ultimate proceeds from the disposition of an investment in the future.  The valuation process uses, as much as possible, objective measures, but it is still based on assumptions and includes inherent uncertainties.  Actual values realized when the Company ultimately disposes of an investment will vary from the current estimate and the variation may be material.

           2. SIGNIFICANT ACCOUNTING POLICIES

              a) Going concern

The directors are currently seeking additional financing to develop and implement the Company’s business plan.  The financial statements have been prepared on the going concern basis, which assumes that the Company will continue its operational existence for the foreseeable future.  The validity of this assumption depends upon the successful raising of additional capital funds. Whilst the directors are presently uncertain as to the outcome of the matters mentioned above, they believe it is appropriate for the financial statements to be prepared on the going concern basis.

              b) Principles of consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, Nascent Advisor S.A. in Paris (interest 100%).

              c) Foreign currency translation

Transactions concluded in currencies other than the currency of measurement have been translated as follows: monetary assets and liabilities have been translated at the exchange rates in effect at the end of the period and revenues and expenses have been translated at the weighted average exchange rates for the period.  Exchange gains and losses arising from such transactions have been included in income.  During the period, such gains or losses were not significant.

             d) Venture investments

Venture investments listed on recognized public securities exchanges are valued using the closing price, that is the last selling price reported by the securities exchange on which they are principally traded or, if no transaction has occurred, the closing bid price is used.  The net excess (shortfall) of this value over (below) the cost represents the unrealized appreciation (depreciation) in value of venture investments.